XRP price bulls watch out! The popular Head and Shoulder pattern is statistically among the most accurate trend indicators.
Dubbed as Head and Shoulders (H&S), the pattern develops when an asset forms three peaks atop a common baseline. The outside peaks, known as Shoulders, are close in height, while the middle one, called the Head, is the highest.
The H&S pattern is completed when the asset breaks below its baselines support, with high volumes, confirming a negative breakout. The so-called neckline also serves as the most common entry point for bearish traders as they target deeper downside levels. Though not every time, an H&S pattern’s profit target comes to be equal to the distance between the pattern’s high point and its neckline.
Peter Brandt, CEO of Factor LLC — a global trading firm he established in 1980 — sees the XRP/BTC instrument painting an H&S pattern. In a tweet published early Friday, Brandt raised speculation that the bearish indicator might prompt XRP to turn into “a tidal wave” against Bitcoin.