Key takeaways:
XRP (XRP) price shows positive signs as a bullish technical pattern emerges on its weekly chart, coinciding with increasing open interest.
Increasing OI backs XRP upside
XRP price is down 2% over the last 24 hours to trade above $2.40 on May 16, but has gained 13% over the past two weeks as the broader cryptocurrency market recovered and XRP open interest (OI) surged.
The OI surged 53% from $3.61 billion to $5.53 billion between May 8 and May 14, before dropping slightly to $5.06 billion on May 16. Futures OI increasing alongside the price indicates bullish sentiment.
Historically, significant increases in OI have preceded major rallies in XRP price. For example, the current scenario mirrors the XRP price pump in the run-up to US President Donald Trump’s inauguration in January, leading to a 70% rally from a low of $1.99 on Dec. 31, 2024, to a seven-year high of $3.40 on Jan. 16.
Related: Is the XRP price rally over for now?
While XRP funding rates have flipped positive, they remain relatively neutral, around 0.0065%, indicating balanced market sentiment despite growing speculation.
XRP price chart paints V-shaped recovery
XRP’s price action has been forming a V-shaped recovery pattern on the weekly candle chart since mid-January, as shown below.
A V-shaped recovery is a bullish pattern formed when an asset experiences a sharp price increase after a steep decline. It is completed when the price moves up to the resistance at the top of the V formation, also known as the neckline.
XRP appears to be on such a trajectory, and bulls need to flip $2.60 back into support in order to increase the chances of the price rising to $3.00. Higher than that, the next logical move would be the neckline at $3.40 to complete the V-shaped pattern. This would represent a 40% increase from the current price.
The relative strength index, or RSI, has increased from 43 to 56 over the last six weeks, suggesting the bullish momentum is picking up.
Several analysts have also predicted further gains for XRP, as long as key support levels hold.
Crypto analyst Egrag Crypto shared an optimistic price prediction for XRP, saying that the breakout from a descending triangle in the daily timeframe could see XRP price retest the $3.40 zone.
Market analyst Dom emphasized that XRP must hold $2.40, which sits above all its volume-weighted average prices (VWAPs) and all the major moving averages, to sustain a bullish continuation.
XRP “saw a clear break of the VWAP bands earlier this week and pushed right to the value area high (VAH) where the price stalled,” the analyst said in his latest X analysis on X, adding:
“For immediate structure to stay intact, we want to see bulls defend these.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
