The price of XRP (XRP) has formed a pennant pattern on the daily chart, a technical pattern often associated with strong bullish momentum. Could this bullish setup and the strong increase in open interest signal the start of XRP's second bullish phase to the double-digit price range?
Increasing open interest drives XRP price.
The price of XRP increased by 15% in the past seven days after a prolonged accumulation period following this altcoin's surge to nearly $3 in early December. According to data from TinTucBitcoin and TradingView, the XRP/USD pair rose 1.5% to a daily high of $2.44 on January 6.
The potential for XRP to continue rising is supported by the increase in open interest (OI), which has risen significantly in the past 24 hours.
Open interest of XRP. Source: CoinGlass.
The chart below shows that XRP's open interest has increased by 45% in the past 24 hours from $2.6 billion to $3.7 billion, indicating that investors are opening positions with the expectation that XRP prices will rise. This also shows that trading activity and capital flows are increasing in the XRP market.
See also: Ethereum has less than a 10% chance of hitting $5K by the end of the year.
Historically, significant spikes in open interest have preceded strong price surges of XRP.
For example, this index surged over 100% from July 13 to July 14, 2023, triggering a price increase of 107% during the same period.
This price volatility occurred after Judge Analisa Torres declared that the XRP Token is not a security in the lawsuit by the Securities and Exchange Commission against Ripple.
Similar price action was observed when open interest increased by 76% from November 29 to December 3, 2024, accompanied by another 100% price increase during the same period.
If history repeats itself, the recent increase in open interest could push XRP prices out of the accumulation phase, recording a significant increase up to $15.
XRP price targets the 'pennant' at $15.
The XRP/USD pair is expected to continue its current upward trend despite some corrections from recent highs, as the chart shows a classic technical pattern forming.
The price action of XRP from November 5, 2024, to January 6, 2025, led to the formation of a pennant pattern on the daily chart, as illustrated in the image below. A daily candle closing above the upper boundary of the pennant at $2.41 would signal the start of a strong upward breakout.
Daily chart of XRP/USD with pennant pattern. Source: TinTucBitcoin/TradingView.
The target set by the height of the flagpole is around $15, equivalent to an increase of about 520% from the current price.
Other bullish indicators can be observed on the chart, including immediate support provided by the 50-day simple moving average at $2.10 and the relative strength index set just above 50.
Some analysts have also predicted a price target of $15 for XRP by 2025, citing favorable market sentiment towards XRP adoption and growth in partnerships, driven by a cryptocurrency-friendly Trump administration.
Using Fibonacci levels and Elliott wave theory, renowned cryptocurrency analyst Egrag Crypto shared an optimistic prediction, stating that XRP could reach $15 by May 5, 2025.
