XRP has experienced an impressive upward movement in recent weeks, with its price climbing over 40% to reach around $2.28 as of April 29. This surge has renewed investor enthusiasm, especially given the token’s rebound from its recent lows. However, despite this bullish momentum, a closer look at XRP’s technical setup and historical data reveals potential warning signs that could dampen further gains in the near term.

Short-Term Patterns Signal a Possible Pullback

On the four-hour chart, XRP is currently forming a rising wedge—a bearish technical pattern that often signals an impending reversal. This pattern emerges when the asset’s price moves within narrowing upward-sloping trendlines, typically indicating fading bullish momentum. As of now, XRP trades near the upper boundary of this wedge, a level where traders often watch for signs of resistance.

Should XRP break below the wedge’s support line, analysts predict a potential decline toward the $1.89 level by mid-May. Such a drop would mark a nearly 17% loss from current prices. Adding to these concerns is XRP’s Relative Strength Index (RSI), which is nearing the 60 mark. While not yet in the overbought zone, it suggests the token is approaching conditions where profit-taking becomes more likely, especially if market momentum cools.

XRP’s Price Exceeds Realized Value by Over 120%

Another metric raising eyebrows is XRP’s current trading price relative to its realized price—the average acquisition cost of all circulating XRP tokens. As of late April, XRP’s realized price stands at approximately $1.02, while its market value hovers well above $2.20. This puts the token at more than 120% above its realized value.

Historically, when XRP trades far above its realized price, corrections tend to follow. This occurred in early 2018 and again in mid-2021, both times leading to significant retracements. The current scenario appears to mirror those patterns, suggesting a possibility that XRP might revisit more fundamentally justified levels if speculative demand subsides.

Supportive Long-Term Structure Offers Hope

Despite the potential for short-term downside, XRP’s long-term outlook remains more favorable. The weekly chart shows that the token has successfully held above its 50-week exponential moving average (EMA), which now sits around $1.67. This is a significant development, as the 50-week EMA served as a persistent resistance level during the extended bear market from 2022 to 2024.

Furthermore, XRP is exhibiting a falling wedge pattern on the weekly chart. This formation, which typically signals bullish reversals, suggests that downward pressure is weakening. If bulls manage to drive the price above the wedge’s upper trendline, a breakout could lead XRP toward the $2.92 level by June—a potential 25% gain from current prices.

Supporting this possibility is a recent RSI bounce from the midline on the weekly timeframe. Such movements often indicate renewed buying interest and growing strength among bulls, which could further support a breakout.

Market Sentiment and Futures Data Reflect Growing Activity

In addition to chart-based signals, XRP is seeing increased activity in the futures market. Open interest in XRP derivatives has risen by more than 30%, showing that traders are positioning for significant price moves. This surge in interest may reflect both optimism and caution, as some investors prepare for more volatility ahead.

As market participants continue to weigh short-term risks against longer-term opportunities, XRP’s price trajectory remains uncertain. On one hand, technical patterns and valuation metrics warn of potential declines. On the other, supportive weekly structures and historical breakout setups offer a more optimistic outlook.

Conclusion

XRP’s recent rally has put the token back into the spotlight, but conflicting indicators now dominate the landscape. While traders enjoy the current momentum, the looming threat of a rising wedge breakdown and the significant gap from realized price cannot be ignored. At the same time, the longer-term setup offers a chance for renewed bullish continuation. In this complex environment, XRP’s next move will likely be determined by broader market sentiment and whether buyers can sustain their strength through the coming weeks.