XRP Breaks Free from Downtrend, But Is the Rally Sustainable?

XRP has made a decisive move, breaking free from a long-term downtrend and igniting speculation about a potential rally.

Market analysts see this as a bullish signal, with some projecting a price surge toward $5. This renewed optimism comes on the heels of Ripple’s long-running legal battle with the SEC finally reaching its conclusion, removing a major source of uncertainty for the token.

Following the lawsuit’s resolution, market watchers highlighted XRP’s breakthrough past its descending trendline, a shift that has caught the attention of bullish traders. The breakout was confirmed by strong buying pressure, reflected in a significant price spike. Analysts now point to key price levels, including $3.40 and $3.78, as critical markers before XRP potentially pushes higher.

Technical indicators also suggest that XRP may be entering an extended rally. Elliott Wave projections indicate an impulsive price movement, reinforcing expectations of continued gains. With the legal uncertainty now behind it, XRP could be positioned for a sustained bullish phase.

Despite the excitement, some experts caution that the rally might not be as strong as it seems. Analyst Ali Martinez pointed out that large investors, often known as whales, have remained on the sidelines, raising concerns about the long-term sustainability of the price increase. Data from Santiment suggests that the recent surge has been driven more by leverage than by organic accumulation.

Further supporting this argument, XRP futures open interest has jumped by $200 million, signaling that leveraged trading is playing a significant role in price action. When markets are fueled by leverage rather than steady buying, volatility tends to increase, making sharp corrections more likely. Whether XRP can maintain its upward momentum will depend on whether real demand follows this initial breakout.

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