XRP has continued to recover from recent lows and has shown steady gains over the past few days. This uptrend has now broken above the descending parallel channel that had been maintaining the price decline since January 16.
Over the past 24 hours, XRP has risen by 6%. With demand gradually increasing, it can create strong momentum to reclaim the $3 level.
XRP Breakout... Bullish Reversal, Signal of Increasing Demand
XRP's 6% rebound over the past day has pushed the price above the descending parallel channel that had been driving the decline since January 16. This bearish pattern occurs when an asset forms lower highs and lower lows within two downward-sloping parallel trendlines.
A breakout above the channel's upper trendline signals a potential reversal or the start of an uptrend. This indicates a shift in market sentiment for XRP, and if the demand persists, it could present an opportunity for upward momentum.
Additionally, the rising Chaikin Money Flow (CMF) for altcoins suggests capital inflows into the XRP spot market. At the time of reporting, this indicator was above 0, at 0.08.
This positive CMF reading indicates a slight buying pressure, suggesting that XRP accumulation is slightly stronger than distribution. If this trend continues, the value of XRP could rise in the coming days.
Furthermore, the increase in open interest in the token's futures market reflects a resurgence of demand for XRP. Currently at $1.24 billion, it has risen by 20% over the past 5 days, during which time XRP's price has increased by 13%.
Open interest represents the total number of outstanding derivative contracts, such as futures or options, that have not been settled yet.
As observed with XRP, when an asset's price rises alongside its open interest, it indicates strong market participation. This confirms the strength of XRP's uptrend and suggests that new capital is flowing into the market to support higher prices.
XRP Bullish... Will Profit-Taking Begin?
XRP's breakout from the descending parallel channel strongly confirms the price gains of the past few days. If buying pressure persists and XRP records new demand, the current uptrend could extend to reach its all-time high of $3.40.
However, if profit-taking resumes, XRP could lose its recent gains and fall back within the descending parallel channel. In this case, the altcoin could trade around $2.13.
