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Highlights
- Ripple (XRP) sees 11% price rally on January 11, outperforming the crypto market.
- XRP breaks out of symmetrical triangle setup, but outlook remains uncertain.
- Open interest in XRP spikes from $2B to $5B in less than a month.
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)
1. Why did XRP's price rally 11% on January 11?
2. What is the current outlook for XRP's price?
3. What could happen to XRP's price if it overcomes the $2.55 resistance level?
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