Bullish flag signals potential rise in XRP to $4.11

Bullish flag suggests XRP’s rally is not over

Technically, XRP’s price action has led to the formation of a bullish flag pattern on the 4-hour timeframe, as shown below. The decline is part of a correction that began on December 3, with XRP losing 25% of its value after reaching a multi-year high of $2.90. A bullish flag is a continuation bullish pattern that forms when the price consolidates in a downward range after a sharp rally. The pattern will be confirmed if the price closes decisively above the flag’s upper trendline at $2.52 and rises to the height of the previous uptrend. This puts the upper target for XRP’s price at $4.11, a new all-time high. Therefore, a break below $2.20 could lead to a test of levels around $2.05, where the 50-period simple moving average (SMA) is located. On a break below this zone, the price risks testing support at the 100 SMA around $1.68.

XRP/USD 4H

This decline also led to a decrease in XRP’s market cap by 8% over the same period to $133 billion, ranking it below Tether USD (USDt) in fourth place. Let’s take a closer look at the factors behind the current XRP sell-off.

XRP Erases All December Gains Against Bitcoin

XRP has outperformed Bitcoin since November, rising about 354% between November 1 and December 5, compared to BTC’s 45.5% gain over the same period.

As a result, XRP moved higher against Bitcoin in November, reaching a 3.5-year high of 0.00003012 on December 3, supported by high network activity and generally positive market sentiment. This ratio fell to 0.00002334 on December 5, erasing all the gains accumulated between December 1 and 3. Interestingly, this happened while Bitcoin’s price had crossed the long-awaited $100,000 mark, setting a new all-time high of around $104,000.

At the same time, positions for over $12.8 million in XRP long trades, compared to $7 million in short trade liquidations, according to data from CoinGlass. This likely contributed to the price pressure.

The closing of long positions coincided with a decrease in open interest (OI) in XRP futures – from $4.3 billion a day earlier. However, OI remains high compared to $722 million since early November. Meanwhile, XRP’s 8-hour funding rate jumped from 0.0163% to 0.0553% over the past day, suggesting that traders may be bullish on altcoins like XRP.