XRP breaks free! Bullish momentum surges as price targets $3. On-chain data hints at a supply squeeze, fueling further gains. Is this the start of a major rally?

XRP Price Surges: Bullish Momentum Ignites as On-Chain Data Signals Supply Squeeze

XRP is on fire! After months of downward pressure, XRP has broken out, fueled by bullish momentum and intriguing on-chain data. The question now is: can this rally last?

Breaking Free: XRP's Bullish Breakout

XRP has officially broken free from months of downward pressure, blasting past a major resistance trendline and igniting bullish momentum across the board. The breakout happened just above $2.29—a key Fibonacci retracement level—and the rally has since driven the price. The price is now heading straight into a key supply zone between $2.54 and $2.65, where sellers might attempt to slow the rally. But if buying pressure continues, the next major upside target is $3.01, aligning with the 0.786 Fibonacci level. A stretch goal? The $3.40 mark, where the full retracement of the previous downtrend sits waiting.

Momentum Indicators Back the Bulls

Momentum indicators are also backing the bulls. The Directional Movement Index (DMI) shows the DI line rising strongly above 31.86, while the -DI has dropped to 15.96—a clear sign buyers have taken the lead. Even the ADX, which measures trend strength, is ticking upward, hinting that this rally has room to run.

On-Chain Data Hints at a Possible XRP Supply Squeeze

According to fresh on-chain data, exchange inflow transactions on Upbit have taken a steep nosedive, especially from smaller wallets holding around 1,000 XRP. What used to be regular waves of inflows exceeding 9,000 transactions have now slowed to a near trickle. This significant drop gives a clearer picture: sellers are retreating, and mighty hands are taking charge. As the flow of tokens to exchanges declines, supply is becoming scarcer, a classic indicator of increasing hoarding and diminishing sell pressure.

Inverse Head-and-Shoulders Pattern Points to Further Gains

Recently, XRP price has formed an inverse head-and-shoulders pattern on the 4-hour chart, a technical pattern commonly deployed in projecting a bullish turnaround. The pattern consisted of a well-mounted left shoulder, a lower trough to form the head, and a higher low to form a right shoulder. The neckline was positioned at the $2.33 to 2.36 range, and the ongoing price is approaching this level.

Cleared Liquidation Zones Pave the Way Higher

According to liquidation heatmaps, nearly all short positions below the $2.36 price level have already been wiped out. This showed that a lot of the intermediate resistance caused by highly leveraged traders has been removed. As a result, should the XRP price break this level, there would be very little overhead pressure in the short term, enabling a surge towards the higher levels.

What's Next for XRP? My Take

Based on the technicals, on-chain data, and overall market sentiment, XRP's bullish momentum seems sustainable for the short term. The breakout above key resistance levels, coupled with decreasing exchange inflows and cleared liquidation zones, suggests a potential supply squeeze and further price appreciation. However, like any crypto, volatility is the name of the game. Keep an eye on that $3 level – a break above that could signal a truly massive rally.

So, buckle up, XRP enthusiasts! It looks like the sleeping giant has finally awakened. Whether you're a seasoned trader or just getting started, now's the time to keep a close watch on XRP as it attempts to conquer new heights. Just remember, always do your own research and never invest more than you can afford to lose. Happy trading, y'all!

News data source: kdj.com

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