XRP may be entrenched in a prolonged slump, but key indicators suggest the altcoin could be primed for a major breakout. According to on-chain and technical data, a potential rebound of up to 85% might be in the cards, possibly lifting XRP’s value toward the $4.80 mark by the fourth quarter.

XRP signals show potential for a significant price rebound

Leverage Reset and Growing Demand

One of the most telling signs of a shift in XRP’s trajectory is the recent drop in open interest. Over the past month, XRP’s open interest declined by more than 44%, a move that often reflects reduced speculative pressure and a healthier foundation for future growth.

Simultaneously, as trading risks cooled, demand has started seeping back into the XRP market. This trend is reflected in the increase in spot trading activity, particularly on South Korean exchanges like Upbit where XRP ranks among the top-traded assets. This shift points to stronger retail interest, potentially creating the momentum needed for a bullish reversal.

Supply Dynamics Point to Accumulation

Another encouraging metric is the declining XRP supply on exchange platforms. More than one billion XRP tokens have been removed from centralized exchanges over recent months, a sign that holders may be moving their coins to private wallets for long-term storage. This typically indicates a phase of accumulation and decreases available supply, which can tighten markets and raise price ceilings under the right conditions.

Furthermore, wallets holding between 10,000 and 1 million XRP tokens have increased in number, suggesting that mid-sized holders are building positions. These wallet behaviors are considered smart money moves and are often early indicators of broader investor confidence.

Chart Signals Suggest a Trend Reversal

On the technical analysis front, XRP’s price action also hints at an upcoming breakout. Notably, the cryptocurrency is approaching the lower boundary of a descending wedge formation—a historically bullish pattern. If XRP successfully breaks above the top of this wedge and maintains momentum, it could initiate a powerful rally.

Based on Fibonacci retracement levels and historic market cycles, technical analysts suggest the token could target resistance levels near $2.70 and eventually as high as $4.80. This projection aligns with previous rally structures in XRP’s price history, indicating the possibility of an 85% gain from current levels.

Timing the Rebound

Although the timing of a potential reversal is uncertain, many expect a more favorable XRP outlook by late 2024. This forecast is reinforced by external factors such as improving market conditions, regulatory clarity over Ripple’s legal status, and rising adoption of blockchain-based payments.

Still, investors should proceed with caution. While accumulation trends and bullish patterns support the case for XRP’s rebound, markets remain unpredictable and sensitive to macroeconomic factors and legal developments.

Related: XRP Price: $12M Max Pain for Bears

As always, those interested in XRP should monitor on-chain data, technical patterns, and global crypto sentiment before making investment decisions based on optimistic rebound projections.