XRP Price Analysis: Is a $5 Breakout on the Horizon?

Key Insights

XRP is exhibiting a classic technical pattern that often precedes rapid short-term price recoveries.

XRP Targets $5 Amidst Recent Decline

The three-day chart of XRP reveals a 'hidden bullish divergence,' where prices form higher lows against a declining RSI. This pattern typically indicates weakening downward momentum.

Notably, two previous instances of this divergence led to significant rebounds. The first, in early 2022, resulted in a 69% surge before prices continued to drop. The second, between late 2023 and early 2024, sparked a 49% rally, stabilizing the price.

These patterns suggest short-term gains following the divergence signal, though they don't confirm a full bullish reversal.

XRP recently dropped by 11.95%, hitting $2.229 on Tuesday. Analyst Guy on the Earth noted the hidden bullish divergence and expressed hope for a rebound, despite a current bearish outlook.

'$2.20 is the next support, with major support between $1.90 and $2 if this range fails.'

The support aligns with XRP’s symmetrical triangle structure and its 1.0 Fibonacci retracement trendline.

A breakout from the symmetrical triangle could target $5, representing a 115% increase from current levels.

Short Positions at Risk

XRP's derivatives data reveals a significant tilt towards short positions, with over $695 million in short liquidation leverage compared to $32.1 million in long exposure, according to CoinGlass.

The short-side liquidity is concentrated between $2.60 and $3.50, indicating that a modest rebound could trigger a 'short squeeze.'

This setup suggests limited downside risk for XRP in the near term, while potential upside volatility could increase if prices move into the short-heavy zone.

Disclaimer: This article does not provide investment advice. Please conduct your own research before making any investment decisions.