XRP price forms a doji candle, signaling a potential rally to $12 after the recent crash

XRP has been experiencing significant volatility, with its price recently diving to a 12-day low of $2.65 amid a broader cryptocurrency sell-off. This drop marked a 21% decline from its highest price this month, reducing its market capitalization to $173 billion. Despite this slump, technical analysis signals that XRP may be poised for a potential rally, particularly if the price can stabilize near the $3 mark.

One key technical pattern that has caught the attention of traders is the formation of a doji candlestick. A doji is characterized by a long lower shadow and a small body, indicating that the opening and closing prices were nearly identical. This pattern often suggests a potential reversal in price direction. If XRP closes the trading day above $3, it could signal a bullish reversal, possibly pushing the price higher.

In addition to the doji pattern, XRP has formed a break-and-retest pattern, which is another positive sign for potential upside. This pattern occurs when the price moves to a new level, pulls back slightly, and then tests that level again before continuing in the same direction. XRP’s move to $2.6580, its highest point since December, could mark the beginning of a strong rally if the break-and-retest pattern holds.

Another important bullish indicator is the symmetrical triangle and bullish pennant patterns formed by XRP in recent months. A bullish pennant is typically a continuation pattern, where the price consolidates after a sharp move up, before breaking out again. The distance of the flag pole, measured from the bottom to the top of the pennant, can indicate how far the price might rise once the pattern completes. In this case, the target for XRP’s potential price could be as high as $12.15, based on this pattern’s projection.

Several fundamental factors are also driving optimism for XRP’s future. Ripple Labs has made significant strides in its regulatory and business operations. The company recently secured money transmitter licenses in New York and Texas, enabling it to expand its financial services in these important markets. This regulatory clarity is a positive sign for XRP’s long-term prospects.

Moreover, the rise in XRP futures open interest is another bullish catalyst. The futures market for XRP has seen an increase in open interest, rising from $650 million in November to over $6 billion in recent weeks. This surge suggests strong demand for XRP and could indicate that investors are positioning themselves for a future rally.

Additionally, the probability of the Securities and Exchange Commission (SEC) approving a spot XRP ETF has risen significantly, with Polymarket indicating a 73% chance of approval. The approval of an XRP ETF would likely bring more institutional investors into the market, driving further demand for the cryptocurrency.

XRP’s daily trading volume has also been impressive, with Ripple USD reaching almost $260 million in daily volume, another sign of strong market activity and interest in the token.

While XRP’s price has faced significant headwinds recently, these technical and fundamental factors suggest that there are strong catalysts for a potential rebound. If XRP can maintain its support near $3 and continue to form bullish patterns, it could very well be on its way to hitting $12, representing a substantial increase from its current price. However, as with all cryptocurrencies, market volatility remains a risk, and traders will need to monitor both technical and regulatory developments closely.