XRP's price chart is currently displaying a "hidden bullish divergence," a pattern that has historically preceded significant upward movements. This technical formation, observed on the 3-day chart, occurs when the price makes higher lows, while the Relative Strength Index (RSI) simultaneously prints lower lows. Technical analysts often interpret this as a sign that the downside momentum is weakening, potentially paving the way for a rally.
Currently, XRP is trading around $2.27, having recently slipped nearly 2% as sellers pushed the price below a key ascending trendline. This breakdown from a multi-month symmetrical triangle pattern has shifted the short-term XRP price prediction toward caution, with analysts noting fading flows and shrinking open interest. The price action now sits below the 20, 50, and 100-day Exponential Moving Averages (EMAs), indicating that momentum has flipped in favor of sellers.
Despite the recent bearish pressure, the presence of a hidden bullish divergence suggests underlying strength. This divergence indicates that despite appearances, the underlying demand remains intact, and the prevailing trend may well resume once the consolidation resolves. The hidden bullish divergence observed on XRP's 1-hour chart indicates strong momentum and potential trend reversal.
However, analysts are also noting several factors that could hinder a potential rally. Finance Magnates highlights that retail interest is fading as macro volatility builds. Additionally, open interest in XRP derivatives has dropped, signaling that traders are exiting positions rather than adding leverage. Spot flows also remain weak, with only $9 million in inflows, indicating hesitation and a lack of accumulation demand.
From a technical perspective, XRP needs to reclaim the broken trendline and EMAs to signal a potential reversal. A move back above $2.49 would be the first sign of strength, while a close above $2.69 would confirm the reversal and clear a path toward $3.00 and eventually $3.20. Failure to reclaim $2.49, however, would keep the downside open, with potential targets near the $2.10 to $2.00 zone, followed by the major demand region at $1.80.
Despite the mixed signals, some analysts remain optimistic about XRP's potential. Javon Marks, a crypto analyst, believes that XRP is showing substantial potential for a huge price breakout amid the speculation for a bull rally. According to Marks, XRP is presently holding a hidden bullish divergence while eyeing a breakout to the staggering $4.80 mark. A surge above the $3.40 level could push the XRP price toward the $4.804 mark, denoting a profit of over 100% from the present level.
However, it's important to note that XRP's price action doesn't occur in isolation. Broader crypto market liquidity, regulatory news surrounding Ripple, and overall risk sentiment will all play a role in determining its future trajectory. Some analysts suggest that XRP's recent drop may be due to institutional exit pressure and a pattern of cyclical exhaustion. Rising interest in early-stage tokens may also be diverting capital away from XRP.
Ultimately, whether XRP can reach $5 remains highly uncertain. While the hidden bullish divergence offers a glimmer of hope, the token faces significant headwinds, including weak momentum, fading retail interest, and regulatory uncertainty. For now, traders should remain cautious and closely monitor key support and resistance levels, as well as broader market trends.
