XRP Shows Strong Bullish Potential as RSI Returns to Key Historical Levels
Following a turbulent October marked by a significant market correction, XRP has managed to stabilize around the $2.20 range, maintaining critical support above the $2 mark. While many investors viewed the recent price drop with concern, technical indicators suggest that XRP may be on the verge of another major upswing.
According to a detailed analysis by crypto analyst CryptoInsightUK, XRP is now trading at levels that previously triggered a substantial price rally. The analyst noted that the altcoin is currently holding within its lower daily range, signaling a resilient support zone that could act as a launchpad for a bullish breakout.
One of the most significant developments highlighted in the analysis is that XRP has cleared a large portion of the liquidity beneath its current price level. This purge began with the steep drop on October 10, effectively wiping out much of the lower-level liquidity. As a result, there’s now less incentive for market makers to push the price down, since the opportunity for profit at these levels has diminished.
Instead, liquidity has shifted to higher price levels, and short positions have been steadily increasing. This creates the perfect scenario for a short squeeze—where rapid upward price movement forces short sellers to cover their positions, thereby accelerating the rally. With so many shorts building up, the potential for this type of movement becomes increasingly likely.
From a technical perspective, the indicators are aligning for a bullish reversal. One of the standout metrics is the Relative Strength Index (RSI). The weekly RSI has held firm at a critical resistance level that dates back to 2020. Currently, the RSI has reset to levels not seen since prior to XRP’s explosive 600% rally in late 2024. This historical context suggests that the altcoin could be preparing for a similar surge.
Another important factor is the potential completion of a Wyckoff Accumulation pattern on the XRP dominance chart. This pattern often precedes a strong bullish move and signals that large market players may be quietly accumulating XRP in anticipation of a price breakout. If the pattern plays out as expected, XRP could be on track to replicate its previous rally, potentially reaching or surpassing the $10 mark—a move that would represent a 600% increase from current levels.
Beyond the charts, XRP’s fundamentals are also showing strength. The altcoin continues to benefit from robust network activity, growing institutional interest, and legal clarity following its partial victory against the SEC. These factors enhance investor confidence and could act as catalysts for renewed buying pressure.
Moreover, the broader crypto market sentiment is gradually shifting towards optimism. Discussions around regulatory frameworks, the potential approval of crypto ETFs, and renewed interest from traditional financial institutions are fostering a more favorable environment for digital assets. As confidence rebuilds, altcoins like XRP that have strong technical and fundamental backing are likely to attract increased attention.
Another point to consider is the ongoing buildup of open interest in XRP futures contracts. This metric has been steadily rising, indicating growing participation from both retail and institutional traders. When combined with the increasing short positions, it further supports the thesis of a potential short squeeze in the near term.
Investor behavior is also aligning with a possible shift. On-chain data shows a decrease in XRP being sent to exchanges, suggesting holders are opting to keep their tokens in cold storage rather than sell. This trend usually precedes upward price movement, as reduced supply on exchanges limits sell pressure and magnifies the impact of new demand.
Furthermore, historical data shows that XRP often lags behind Bitcoin and Ethereum during initial market recoveries, only to surge in the later stages. If this pattern holds, XRP could be positioning itself for a delayed, but powerful, rally as the broader market strengthens.
Lastly, it’s worth noting the psychological impact of XRP’s price holding above $2. This round number support level often acts as a psychological anchor for traders and investors, reinforcing confidence and encouraging accumulation. Should momentum build, crossing above $2.50 could trigger a wave of FOMO (fear of missing out), bringing in fresh capital and further driving momentum.
In conclusion, although XRP has recently weathered a market downturn, all signs point to a potential bullish breakout. From technical indicators like RSI and Wyckoff patterns to market dynamics such as liquidity depletion and rising short interest, the stage appears to be set for XRP to make a significant move. Whether or not it reaches the lofty $10 target remains to be seen, but the groundwork for a major rally is undeniably forming.