XRP Signals Bullish Breakout Backtest

What to Know:

• XRP has completed a backtest of its Ichimoku Cloud breakout on the 2-week timeframe, according to analyst Cantonese Cat.
• The Ichimoku Cloud is a comprehensive indicator used to identify support and resistance, momentum, and trend direction.
• Successful backtests of major breakouts can signal renewed bullish momentum and attract institutional interest.

XRP has caught the eye of technical analysts after completing a significant backtest of its Ichimoku Cloud breakout on the 2-week timeframe. According to market analyst Cantonese Cat, this development suggests a potential continuation of the bullish trend that began in late 2024. The Ichimoku Cloud, a versatile indicator, offers insights into support and resistance levels, momentum, and overall trend direction. Here’s a deeper look at what this means for XRP and the broader market.

Historical Context Leading into the Breakout

Throughout most of 2024, XRP traded below the Ichimoku Cloud, struggling to break past the $0.60 resistance level. The presence of a red (bearish) cloud overhead indicated persistent downward pressure. However, this changed dramatically in November 2024. In early November, XRP experienced a surge, with two large bullish 2-week candles propelling the price from around $0.50 to over $2.9. This breakout cleared both the long-standing horizontal resistance and the Ichimoku Cloud itself.

The breakout also coincided with a shift in the forward-projected cloud from red to green, signaling a transition from a bearish to a bullish market structure. This marked XRP’s first confirmed 2-week Ichimoku Cloud breakout in several years, setting the stage for further potential gains.

XRP’s Post-Breakout Expansion and Consolidation

Following the breakout, XRP continued its upward trajectory into December 2024 and January 2025, eventually reaching a peak of $3.4. During this phase, several Ichimoku components aligned to support the continuation of the trend. The Tenkan-sen (conversion line) moved above the Kijun-sen (base line), indicating strengthening short- and medium-term momentum. Additionally, the Chikou Span (lagging line) cleared both the price and the cloud, further confirming the strength of the trend.

Between February and July 2025, XRP entered a period of consolidation, fluctuating between $1.6 and $2 on the downside and $3 to $3.60 on the upside. Despite increased volatility, XRP did not close back inside the cloud on the 2-week chart, suggesting underlying support.

The Backtest Phase

The critical phase occurred from late October to early November 2025. After retreating from the mid-$3 range, XRP retraced toward the top of the green Ichimoku Cloud, falling into the $1.90 to $2.00 area. This interaction with Senkou Span A and the rising Kijun-sen represented an Ichimoku backtest. A backtest occurs when the price returns to the cloud after a breakout to confirm whether former resistance has flipped into support.

XRP successfully held this zone, with no 2-week candle closing below the cloud. The cloud itself remained green and upward-sloping, reinforcing the bullish structure. This successful defense of the cloud top is a key signal for technical analysts.

Backtest Completion and Current Structure

In the weeks following the pullback, XRP stabilized above the cloud. By January 2026, the price had reclaimed the Tenkan-sen and was trading above $2, with the Kijun-sen positioned just below. The forward cloud remains green, indicating that bullish structural conditions are still in place. This sequence—a breakout above the cloud, consolidation above it, a pullback into the cloud, and a successful hold—led Cantonese Cat to conclude that XRP has completed the backtest of its 2-week Ichimoku Cloud breakout.

From an institutional perspective, a completed backtest can signal a more reliable foundation for future price appreciation. It suggests that the market has tested the new support level and found it to be robust, potentially attracting further investment.

Potential Implications and Considerations

While the completion of the Ichimoku Cloud backtest is a positive signal, it’s important to consider other factors. Market conditions, regulatory developments, and broader macroeconomic trends can all influence XRP’s price action. Investors should also be aware of the inherent volatility in the cryptocurrency market and manage their risk accordingly. However, the successful backtest suggests that XRP has established a stronger technical foundation, which could support further upside potential.

Overall, the completion of the 2-week Ichimoku Cloud backtest represents a potentially bullish development for XRP. The ability to hold support within the cloud after a significant breakout suggests a shift in market structure and could attract renewed interest from both retail and institutional investors. As always, vigilance and a diversified approach remain crucial in navigating the crypto markets.

Related: XRP Signals Pullback From Critical Level

Source: Original article