[DigitalToday reporter Yoonseo Lee] An analysis says XRP could extend gains to $1.32 after forming an inverse head-and-shoulders pattern on the daily chart.

On July 23 (local time), blockchain outlet The Crypto Basic reported that based on the current XRP price of $1.10, the target is about 15 percent higher.

The key level is $1.09. As long as XRP holds this area, the breakout move and the inverse head-and-shoulders pattern remain valid. A return to $1.32 was presented as the main upside target.

Chart action shows XRP extended its decline after being pushed back from the $1.32 support zone in early June. That area had been a demand zone that repeatedly prevented declines after the crypto market's sharp drop in February, but sellers gained the upper hand after June 1 and it eventually broke. The drop to $1.05 on June 6 formed the left shoulder of the inverse head-and-shoulders, and the head formed on the June 26 decline to $1.009.

At the time, the market prevented further declines below the psychological support at $1. Buying pressure blocked a fall below $1 and XRP subsequently recovered. It then rebounded to $1.05 on July 13, completing the right shoulder and confirming a bullish structure.

Technically, XRP also broke a downtrend line that had capped rebounds since May. XRP has posted lower highs since the May 30 peak of $1.36, a move that aligned with the trend line. But it rose about 3 percent on July 21 to break above resistance, shifting upward momentum toward buyers. If the move holds, it could open a path to higher prices.

Supply-demand and derivatives indicators were also cited as bullish signals. Of XRP that flowed out of centralised exchanges on July 22, 77.8 percent was whale holdings, and over the past three days the futures market saw more new positions opened than liquidations. Net change rose 452 percent. Inflows totalled $1.1 billion and outflows $1.04 billion, for net inflows of $59 million.

Still, if the $1.09 support level breaks, this bullish scenario could weaken. Even after a neckline breakout, an inverse head-and-shoulders pattern gains validity only if the price holds key support. If it slips below that zone, short-term buying could move into a pullback.

The market also sees $1.32 as a level to gauge whether the previous key support has been regained. If XRP recovers that area, it could signal a partial reversal of the technical structure damaged by the June decline. If selling pressure strengthens near $1.32, the short-term rebound could be limited. In that case, XRP is likely to search for direction between $1.09 and $1.32.

That has clarified the short-term focus for XRP. The next variables are whether the price can stay above $1.09 and maintain the trend-line break, and whether whale-led exchange outflows and futures-market inflows lead to further gains.