Bull Flag Formation on Daily Chart

XRP has recently formed a bull flag pattern on the daily chart, signaling potential upward momentum. After weeks of consolidation following its rally to $3.00 in early December, XRP gained 17% over the last seven days, supported by a key trendline. This technical setup often indicates strong bullish potential in the coming days.

Open Interest (OI) Spike Fuels Investor Optimism

XRP's Open Interest (OI) soared by 71.95% in the past 24 hours, increasing from $2.71 billion to $4.66 billion. This sharp rise in OI reflects heightened investor activity, as traders open new positions in anticipation of a price surge. The influx of fresh liquidity, despite recent price consolidation, reinforces the bullish outlook for XRP, coinciding with Donald Trump's upcoming inauguration on January 20.

Exchange Net Flows Show Diverging Investor Sentiment

The past week's exchange net flow data presents a mixed picture. Positive buying pressure from Binance, OKX, and Bybit resulted in combined net outflows of $70.18 million, signaling bullish sentiment from international investors. However, US-based investors showed a bearish bias, with Coinbase recording a net inflow of $65.85 million during the same period.

Liquidation Data Highlights Market Dynamics

Coinglass data reveals $2.73 million in XRP liquidations over the last 24 hours. This includes $1.18 million in long liquidations, reflecting traders forced to exit bullish positions, and $1.54 million in short liquidations, indicating losses for those betting on a price decline. These figures underline significant market activity amid XRP's evolving trend.

Potential Breakout of Bullish Pennant

XRP is testing the upper resistance boundary of a bullish pennant for the second time in three days. A high-volume breakout above this level could propel XRP toward a new all-time high near $5.00. Conversely, a rejection may lead the price to retest support at the lower boundary, close to the 50-day Simple Moving Average (SMA).

Expert Commentary on Flag Formation

Veteran trader Peter Brandt commented on XRP's flag pattern via an X post, noting that "half-mast flags" should ideally resolve within six weeks to maintain their reliability. A prolonged consolidation could alter the pattern's validity. If the breakout occurs as expected, XRP's market cap could surge to $500 billion, highlighting the significant potential in this setup.