Ripple’s XRP has been making waves in the crypto market, with investors cashing out nearly $800 million in profits** following a sharp 20% price surge. The momentum comes amid growing optimism around a potential rally toward **$4.75, fueled by technical patterns, strong options activity, and recent developments from Ripple Labs. While profit-taking and declining on-chain activity hint at short-term caution, broader market indicators continue to signal bullish momentum.
Bullish Surge Follows Stablecoin Approval
XRP’s latest rally was triggered by Ripple’s announcement of regulatory approval to launch RLUSD, its U.S. dollar-pegged stablecoin. This development has reinvigorated investor confidence, reinforcing Ripple’s expanding footprint in the digital asset ecosystem. Since bottoming just below $2, XRP has climbed steadily, pushing investor returns into the hundreds of millions.
According to on-chain analytics platform Santiment, realized profits from XRP holdings surged to nearly $800 million in a single day—highlighting significant investor exits at higher price levels. While this level of profit-taking can sometimes dampen upward momentum, it also reflects strong conviction among early holders who are strategically capitalizing on the rally.
👉 Discover how market sentiment shifts can unlock new trading opportunities.
On-Chain Activity Shows Signs of Cooling
Despite the price surge, on-chain data reveals a decline in user engagement. Weekly active addresses for XRP dropped from 496,000 the previous week to 341,000 by mid-week, signaling reduced transactional activity and potentially waning retail interest. This contraction may suggest that much of the current momentum is being driven by larger holders or institutional players rather than broad-based adoption.
Still, lower on-chain activity doesn’t necessarily negate bullish trends—especially when price action and derivatives markets point upward. In fact, many major rallies in crypto history have occurred alongside temporary dips in active addresses, as capital concentrates in fewer hands during accumulation phases.
Options Market Bets on $5 Breakout
While investors take profits, derivatives traders are positioning for even higher gains. Data from Amberdata, as reported by CoinDesk, shows that the $5 strike call option** is now the second-most traded contract for XRP. More notably, the **$5 call on Deribit holds a notional open interest of $1.25 million—the highest among all out-of-the-money (OTM) calls.
Out-of-the-money calls indicate trader expectations that XRP will rise above current market prices within the option’s expiry window. The growing open interest at the $5 level reflects strong speculative appetite and growing confidence in a sustained breakout.
This divergence—between short-term profit-taking and long-term bullish bets—creates a dynamic market environment where volatility could spike following the next major catalyst.
Bull Flag Pattern Targets $4.75
Technically, XRP is forming a classic bull flag pattern on its daily chart. This formation consists of two key phases:
- A sharp upward move (the "flagpole") following Ripple’s stablecoin news.
- A subsequent consolidation phase (the "flag") within parallel downward-sloping trendlines.
Bull flags are continuation patterns, meaning that once price breaks above the upper resistance of the flag channel with strong volume, the prior uptrend typically resumes.
Key Levels to Watch:
- Breakout Confirmation: A daily close above the upper boundary of the flag channel.
- Immediate Resistance: The psychological $3.00 level, which must be cleared to validate further upside.
- Price Target: Up to $4.75, based on measuring the height of the initial flagpole and projecting it from the breakout point.
Additionally, momentum indicators support the bullish case:
- The Relative Strength Index (RSI) is above 50 and trending upward.
- The Stochastic Oscillator shows bullish crossover and room for further upside.
However, traders should remain cautious: a daily candlestick close below $1.35** would invalidate the bull flag thesis and could send XRP tumbling toward **$0.93, wiping out recent gains.
👉 Learn how technical patterns like bull flags can improve your trading accuracy.
Frequently Asked Questions (FAQs)
Q: What causes XRP’s price to rise suddenly?
A: Sudden price increases in XRP are often driven by regulatory clarity, product launches (like RLUSD), exchange listings, or broader crypto market rallies. News from Ripple Labs, especially regarding litigation or partnerships, also plays a significant role.
Q: Is profit-taking by investors bad for XRP’s price?
A: Not necessarily. While large-scale selling can cause short-term dips, profit-taking often follows extended rallies and clears weak hands. If demand remains strong, new buyers can absorb supply and push prices higher.
Q: What is a bull flag pattern, and why does it matter?
A: A bull flag is a continuation pattern indicating a pause after a strong price rise. Traders watch for breakouts above the flag’s resistance as signals of renewed bullish momentum—often leading to moves equal to the size of the initial surge.
Q: How reliable are options markets in predicting XRP’s price?
A: Options markets reflect trader sentiment and hedging behavior. High open interest in out-of-the-money calls (like $5) suggests growing confidence in upside potential, though actual price movement depends on broader market conditions.
Q: Can macroeconomic factors affect XRP?
A: Yes. Like other risk assets, XRP reacts to macro trends such as U.S. Federal Reserve interest rate decisions, inflation data, and dollar strength. A weaker dollar often boosts crypto prices by increasing risk appetite.
Q: What would invalidate the current bullish outlook for XRP?
A: A daily close below $1.35 would break key support and suggest a bearish reversal. Additional red flags include declining volume on up days, negative on-chain metrics, or adverse regulatory news.
👉 Stay ahead with real-time analytics and advanced charting tools for XRP and other cryptos.
Final Outlook: Caution Meets Opportunity
XRP stands at a pivotal moment. On one hand, $800 million in realized profits and declining active addresses suggest some fatigue in retail participation. On the other, strong options positioning, a valid bull flag pattern, and Ripple’s expanding product suite point toward sustained institutional interest.
For traders and investors alike, the key will be monitoring volume on breakout attempts and watching for confirmation above $3.00. A successful move beyond this level could open the path to **$4.75**, while failure may lead to consolidation or correction.
As always in crypto, timing and risk management are crucial—especially when sentiment and technicals align for a potential explosive move.
Core Keywords: XRP, Ripple, bull flag, $4.75 target, options trading, profit-taking, RLUSD, crypto rally