The XRP price went parabolic on Monday after Donald Trump announced plans to launch a strategic crypto reserve with a selection of made-in-USA coins. Ripple jumped to a high of $3 on Monday, up by 53% from its lowest level on Saturday.
Why XRP Price Avoided Disaster
The strong XRP price surge helped to avert disaster because it happened when the coin bottomed at $1.9600 on Saturday. That was a crucial price since it was along the lower side of the forming head-and-shoulders pattern.
The head of this trade was at $3.40, the highest swing on January 16, while the right and left shoulders were at $2.8. A H&S is one of the most bearish patterns.
As such, had the coin dropped below the neckline at $1.96, it would have confirmed the bearish outlook for the XRP price. It would also have confirmed that Ripple was moving from the distribution phase (characterized by seller dominance) of the Wyckoff Theory into the markdown phase.
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As such, that would have risked it dropping to the 61.8% retracement point at $1.5377 and the 78.2% point at $1.0360.
Still, XRP price is not out of the woods yet; further gains will be confirmed if the coin exceeds the key resistance level of $3.40, its highest level this year. A break above that level would point to more upside, with the next point to watch being at $5.
Ripple Has Key Catalysts
The XRP price surged after Donald Trump said that it would be included in the US government’s strategic reserves. Some analysts question whether XRP, which is not decentralized and is largely controlled by Ripple Labs, should be part of these reserves.
XRP price also surged as tokens in the XRP Ledger ecosystem soared. Sologenic token surged by 32% to $0.3885, while Coreaum (COREUM), XRP Army, PHNIX, and Salute (SLT) soared by over 50%. This surge is a sign that the XRP Ledger network is doing well.
There are also rising odds that the Securities and Exchange Commission (SEC) will approve a spot XRP ETF later this year. Such a move will likely lead to more demand for XRP and other altcoins, especially among institutional investors.
Additionally, XRP price may benefit from the SEC’s recent decision to end lawsuits against top companies like Uniswap, Coinbase, and Gemini. There are rising odds that it will do the same with Ripple Labs.
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