XRP Rally: Is the Momentum Fading or Just Paused?

XRP has recently drawn significant attention in the cryptocurrency market, with the token gaining over 50% in just a month. This strong upswing has many investors evaluating whether this momentum will sustain or if a retreat is imminent. The focus keyword here is XRP, and understanding the current patterns and metrics is essential to navigating its future movements.

Bearish patterns signal caution

XRP recently exhibited a double top formation, peaking around $2.65 and retracing to a neckline support close to $2.47. This classic technical pattern typically indicates that bullish strength is waning. The confirmation of this setup came as the price dipped below the neckline, implying a potential bearish breakout. If the market continues to follow this trend, XRP may retreat toward the $2.30 mark.

Investors should also note that repeated failures to surpass the $2.65 resistance only strengthen the validity of the double top structure, raising the likelihood of continued decline unless buying pressure intensifies.

Breakdown from rising wedge adds to bearish outlook

In tandem with the double top, XRP has also slipped below a rising wedge pattern—a setup known for prompting reversals from bullish to bearish conditions. The pattern had previously guided the price upward, but an apparent breach below its lower boundary signals brewing downside pressure.

The test of support from the 50-period exponential moving average on the four-hour chart further amplifies this vulnerability. Should XRP fail to hold above this key moving average, it risks a steeper correction that could land near $1.94. The potential fall gains weight considering this value is derived from the wedge’s height difference projected downward from the breakdown point.

Moreover, the $2.00–$2.04 range holds a noticeable concentration of leveraged long positions, estimated to total around $50 million. A drop below this zone could trigger a cascade of liquidations, intensifying sell-offs—a scenario known as a long squeeze.

On-chain metrics suggest denial among traders

XRP’s Net Unrealized Profit/Loss (NUPL), a measure of unrealized profits and losses among holders, currently resides within the “Belief–Denial” zone. Historically, this zone has preceded market corrections, as it indicates that many investors still expect further gains despite waning momentum. Similar NUPL levels were observed prior to notable pullbacks in 2018 and 2021.

Given the parallels, there’s reason to be cautious. While sentiment might currently remain optimistic, the underlying signals point to growing risks in the short term.

Long-term outlook remains constructive

Despite looming short-term challenges, broader technical indicators maintain a bullish tone for XRP. A larger time-frame falling wedge, extending over several months, shows signs of a potential breakout. If XRP manages to stay above the wedge’s upper boundary and hold key moving averages—the 20-day and 50-day exponential averages—it could chart a path toward a target near $3.69, representing a possible 45% increase.

However, a fallback below those markers could invalidate this bullish breakout, possibly pushing the token down to $1.75. Still, even more ambitious projections based on symmetrical triangle formations and Fibonacci analysis suggest targets as high as $5.24 and even $17.

This signals a notable dichotomy: while the near-term trajectory appears uncertain and skewed to the downside, the longer-term charts suggest that XRP may yet resume its upward climb once current corrective pressures subside.

Clearly, for traders and investors, the present moment is one requiring vigilance. XRP’s movements around crucial support zones and its reaction to technical resistance levels will likely determine whether this rally is merely pausing or approaching a deeper correction.

XRP has continued to intrigue cryptocurrency analysts with its volatile yet potentially lucrative market structure. Similarly, market commentary around an ongoing altseason adds layers to the speculation and excitement, even if short-term metrics advise caution. Historical trading behavior and positioning near heavily leveraged zones, as reflected through data from CoinGlass, further underline how technical formations can quickly evolve into market-defining events.

Additionally, on-chain behavioral data from platforms such as Glassnode help reinforce a comprehensive view of XRP’s current phase in the market cycle. While the short-term chart action appears concerning, the technical framework on longer timelines suggests that bullish enthusiasm is not entirely misplaced.

Related: Expert Advice: Sell XRP If You’re Confused

As the cryptocurrency sector continues to mature, XRP remains a key player with significant speculative and developmental potential. Whether navigating support zones or eyeing breakout levels, both traders and long-term holders will find XRP’s evolving chart patterns worth monitoring to gauge market direction and strategy alignment.