Is XRP Price Ready to Break Out or Due for a Short Dip?

Ripple’s XRP appears to be gearing up for a potential breakout after forming a bullish flag pattern on the daily chart. This setup could propel the token 15% higher in the near term.

On-chain data confirms traders’ optimism. However, caution is advised in the short term. A key technical indicator suggests a possible near-term dip before the next major leg up.

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XRP’s Bullish Flag Signals 15% Upside

A bullish flag pattern has emerged on the XRP/USD daily chart. The altcoin has repeatedly attempted to close above the upper line of the “flag-like” side of this pattern over the past six trading sessions, confirming the underlying bullish strength.

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This pattern is formed when a strong upward price rally is followed by a period of consolidation resembling a downward-sloping or sideways “flag.” It signals that the asset temporarily pauses before likely resuming its upward trend. 

A breakout above the flag’s upper line usually confirms this pattern and often triggers an uptrend that mirrors the height of the preceding flagpole. This puts a potential 15% rally toward $3.45 on the table for XRP. If demand strengthens at this point, the altcoin could attempt to rally toward $4 and touch a new peak.

Moreover, XRP’s funding rate in the derivatives market remains positive. This implies that most traders are positioning for more upside. At press time, per Coinglass, this is at 0.0064%.

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The funding rate is a periodic payment exchanged between long and short traders in perpetual futures markets to keep contract prices anchored to the spot price. When the rate is positive, the demand for longs outweighs shorts — a clear signal that market sentiment leans bullish.

Sustained periods of positive funding rates, like XRP’s, indicate strong market confidence in an asset’s price potential. 

XRP’s Rally Could Stall as Bearish Crossover Forms

If XRP’s Bullish Flag pattern plays out as expected and the token successfully breaks past the flag’s upper line, its price could gain toward $3.45 in the mid-term.

However, caution is advised in the meantime. Readings from XRP’s Moving Average Convergence Divergence (MACD) show that it has formed a bearish crossover, suggesting that the altcoin might experience a brief dip before its next potential surge.

A bearish crossover is formed when an asset’s MACD line (blue) attempts to break below its signal line (orange). Historically, this pattern marks the beginning of a downward phase. It indicates that buying pressure is weakening, and sellers may begin to take control. 

If this bearish momentum continues, XRP’s price could retreat toward the flag’s support level around $2.83.