XRP has been showing increased bullish sentiment as it moves toward a potential breakout, with traders setting their sights on the $2.60 resistance level. After weeks of consolidation, XRP has broken out of a bullish pennant pattern, signaling the possibility of further upward movement. As sentiment across retail and institutional traders aligns, the stage is set for XRP to push higher, with options interest and whale activity further fueling the optimism.

The breakout pattern indicates that XRP may continue its upward trend. The token has been trading in a narrowing range, forming higher lows, and successfully retesting a key support level around $1.80. Currently hovering just below resistance at $2.17, XRP is showing signs of bullish continuation. If the momentum holds, the next target on the horizon is $2.60, a key resistance level that has previously seen selling pressure.

Despite this positive technical outlook, there are some cautionary signals. A slight uptick in Whale-to-Exchange flows suggests that large holders are repositioning rather than making aggressive sales. This indicates strategic movements rather than panic selling, reflecting confidence in the market’s stability. Whales appear to be waiting for a clear price signal before making major moves. This cautious positioning could set the stage for a potential breakout as large holders await the right moment to act.

Adding to the optimism is the recent rise in options interest, which has surged by more than 24%. This indicates growing speculative activity in the market, suggesting that traders are positioning for a potential breakout above the $2.40 mark. The increase in open interest signals that traders expect volatility, further supporting the case for a strong move upwards in the near term.

At the same time, XRP’s rising price has triggered some caution signals in the market. The NVT (Network Value to Transaction) ratio has increased significantly, rising by 136% in recent days. This spike indicates that XRP’s market cap has grown faster than on-chain transaction volume, which can sometimes be a sign of overvaluation. While the price momentum remains strong, traders should be cautious if network activity fails to catch up, as the price may become unsustainable if utility does not follow.

Another potential catalyst for upward movement is the short liquidation zone that has formed near the $2.10 level. Data from Binance shows a dense concentration of short liquidations between $2.03 and $2.10. A move above this price could trigger a cascade of short covering, adding upward pressure on XRP’s price. Furthermore, if XRP manages to break past $2.16, where additional short liquidation leverage is building, the price could continue its upward trajectory, triggering further buying momentum.

The $2.10 to $2.20 region is a critical inflection point for XRP, as it represents a convergence of both short squeeze potential and the risk of long liquidations. Traders entering the market with high leverage could face liquidation pressure if the price fails to hold above this level. This makes the upcoming price action crucial for determining whether XRP can successfully maintain its bullish trend.

In conclusion, XRP’s technical breakout, rising sentiment, and increasing options activity indicate that the altcoin is well-positioned for a potential move toward the $2.60 resistance. Whale flows and strategic positioning suggest that large holders are confident in the asset’s potential. However, caution is warranted due to the elevated NVT ratio and the need for strong on-chain performance to support the price. If XRP can break and sustain momentum above $2.60, it would likely confirm a trend shift and solidify its bullish narrative for the future.