Canton (CC) price surges 42% against XRPL — Is a healthy correction imminent?

Canton Network's price has surged nearly 42% in the last seven days and approximately 12% in the last 24 hours. Discussions comparing it to XRPL (XRP Ledger) and its potential for outperforming it have fueled interest; however, Canton's price rally is currently facing potential resistance.

A correction might not necessarily be a negative thing. It could be a consolidation phase, preparing for the next upward move on the price chart. The question now is whether this move will become a "reset" to continue the uptrend, or the beginning of an even bigger surge.

The cup pattern faces a corrective move, but a signal that limits downside risk.

Canton Network (CC) may be forming a “cup and handle” pattern on the daily chart. The cup portion has completed, extending from the peak on November 12th to December 28th. Currently, the handle portion may form through this correction, occurring as the price is trading near $0.128 after failing to break above $0.137.

The Relative Strength Index (RSI), a momentum indicator, has shown a fairly typical bearish divergence signal. Specifically, Canton prices reached new higher highs from November 12th to December 28th, while the RSI reached lower highs.

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Divergence is often a sign of a trend reversal or downward correction. In Canton's case, this leans more towards a correction, as Capital flows remain quite positive.

The Chaikin Money Flow (CMF) indicator, which tracks the strength of money flow based on price and volume, remains above zero at around 0.24. During the previous strong rally from December 6th to 21st, the CMF fell below zero on December 13th, at which point the upward momentum stalled. However, the situation is different now; the CMF is still holding strong above zero.

As long as the CMF remains above 0, any price drop will be limited to the handle formation phase. If the CMF rises above 0.40, it indicates that money flow is aligning with the price – and an uptrend may resume.

The decline in social media dominance suggests that the accumulation phase is not a sign of weakness.

Social media discussion peaked on December 28th at around 2.2%, then dropped sharply to about 0.16%. Less discussion isn't always a bad sign. In this case, it supports the view of a correction, especially after the price surged over 42% in just one week.

Less attention also means fewer traders react hastily, which often helps the "cup and handle" pattern form more clearly and cleanly.

Being positively compared to Ripple helped Canton reach its recent local price peak.

Now, attention seems to be waning. Therefore, the likelihood of accumulation and sideways movement is higher. If the value of discussion rises above the previous peak, that could be the first signal that upward momentum is returning.

Key Canton price milestones to watch

Canton Coin (CC) is currently trading near $0.128. The breakout area begins at $0.137. A close above this level would be a crucial first step. A close above $0.144 would confirm a breakout from the "neck" of the pattern. The first price target for Canton is $0.214, which is also its post-listing high.

If the upward momentum continues to strengthen, the next target could reach nearly $0.34, corresponding to 141% of the cup's height from the lowest Dip to the "neckline," and then further upwards from the breakout point. This is a fairly optimistic target if the money flow and price move together.

If a deeper correction occurs, the $0.118 level is the first support zone for Canton to watch . A break below $0.096 would signal a failed handle pattern and the cup portion would also disappear. If the market worsens further, the price could fall to $0.074, or even $0.058 if liquidation evaporates. However, currently, as long as the CMF remains above 0, the CC price fluctuating between $0.118 and $0.096 is still just a handle accumulation phase, not a reversal of the uptrend.

Currently, Canton's price is caught between two possibilities: either a healthy correction within an uptrend, or a sign of an early breakdown. The next trend will depend on whether the price breaks above $0.137 or falls below $0.118.