Ripple (XRP) has been a trending coin for the past few weeks due to its massive rally and unmatched volatility. Ripple CEO Brad Garlinghouse’s dinner with President-elect Donald Trump has increased its popularity among crypto investors. That is why XRP saw an 11% price rally on January 11, while the rest of the crypto market, including Bitcoin (BTC), struggled.
XRP Price Prediction: Bulls In Trouble Despite Bullish Breakout
Since December 3, 2024, XRP has been hovering inside a symmetrical triangle setup. This technical formation contains the price forming lower highs and higher lows. As the token approaches the triangle’s apex, the volatility is extremely low, leading to a breakout. This setup has no directional bais, which means XRP could break out either way.
However, on January 11, the token shot up 11%, suggesting the resolution of the ongoing consolidation pattern. However, the outlook is not clear yet, and it is unlikely that Ripple price will continue its ascent until a few conditions are met.
Despite the recent uptick, the outlook remains bearish for a few reasons.
3 Reasons Why is XRP Dropping Today?
After the 11% rally on January 11, XRP set up a local top at $2.60 and is already dropping. Here are three reasons why.
Reason 1: Due to profit-taking and exhaustion after a recent double-digit rally, XRP token is down 1.76% today and trades around $2.46.
Reason 2: The 40-day volume profile shows that 70% of the volume was traded between $2.20 and $2.53. Despite the recent breakout from the symmetrical triangle, XRP has dropped below the volume profile’s upper limit of $2.53.So long as bulls fail to overcome this level, the outlook remains uncertain and skewed in favor of bears.
Reason 3: The recent breakout could be speculated as a trap that wiped out $80 million in short positions and lured long positions. According to CoinGlass data, long positions worth nearly $42 could get wiped if the token drops below $2.44.
Open Interest Spikes, What’s Next For Ripple?
XRP’s open interest has rocketed from $2 billion on December 22, 2024, to $5 billion as of January 13. With this key indicator more than doubling in less than a month, it is clear that speculators are heavily invested in the coin.
A spike in open interest, coupled with a breakdown below the volume area’s upper limit, reveals a short-term bearish outlook. However, if XRP price manages to overcome $2.55, it could kickstart a 33% move to $3.15.
Frequently Asked Questions (FAQs)
The rally was likely due to Ripple CEO Brad Garlinghouse’s dinner with President-elect Donald Trump, increasing XRP’s popularity among crypto investors.
Despite the recent breakout, the outlook remains uncertain and skewed in favor of bears due to profit-taking, exhaustion, and failure to overcome key resistance levels.
If XRP manages to overcome $2.55, it could kickstart a 33% move to $3.15.
Akash Girimath
Akash Girimath, an engineer by training, has developed a deep fascination with the complexities of cryptocurrency markets. As a senior reporter and analyst, he specializes in crypto analysis and contributes his expertise to notable platforms such as AMBCrypto and FXStreet. In addition to his analytical work, Akash actively trades cryptocurrencies and manages a small crypto fund for friends and family. His role involves providing insightful market analysis and keeping readers informed about the latest trends in the crypto world. Follow Him on Youtube , X and LInkedIn
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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