XRP Is On the Rise, But a Drop to $1 Could Happen Unless It Breaks This Key Price Level

XRP has recently shown a notable rebound, rising from a low of $1.8890 to over $2.30 in a short period. This surge is partly attributed to a broader recovery in the crypto and stock markets, with major U.S. indices like the Dow Jones, S&P 500, and Nasdaq 100 all seeing more than a 1.5% increase last Friday.

Additionally, XRP’s positive price action has been fueled by growing optimism regarding regulatory developments. There’s speculation that the Securities and Exchange Commission (SEC) might approve a spot XRP ETF, with odds now at 76% according to Polymarket. If this happens, it would likely attract substantial inflows from Wall Street investors into XRP, further boosting its price.

Another factor driving optimism is the possibility of the SEC dropping its lawsuit against Ripple Labs, which could unlock new business opportunities for the company. Ripple Labs has been focused on expanding its partnerships with banks and financial institutions to strengthen its position in the global money transfer industry, competing directly with SWIFT, which handles trillions of dollars in transactions annually.

Additionally, whale accumulation of XRP continues to be a significant factor, with large investors showing interest in the coin. For instance, one whale spent $24.2 million to purchase 10.3 million XRP tokens on Bitfinex, further signaling confidence in the asset.

The technical picture for XRP shows that its recent rebound came after the price successfully defended the key support level at $1.9447. This level has acted as a critical area of support since December, with Ripple failing to break below it on multiple occasions. The only significant breach occurred in February, but it was a false breakout.

Moreover, the $1.9447 support also aligns with the 200-day moving average, making it an important technical level for XRP. If XRP drops below this support again, it could signal a further decline, potentially pushing the price down to the psychological $1.00 support level.

On the flip side, the bullish scenario for XRP requires the price to break above the right shoulder of a head-and-shoulders pattern that has been forming since November. The right shoulder is located at $3.00, and a successful breakout above this level could invalidate the bearish pattern and pave the way for a move towards the $3.40 level.

If XRP successfully clears the $3.40 level, it would likely target further gains, with the next major resistance at $5.00.

While XRP is currently riding a wave of optimism and positive sentiment, it faces significant technical resistance at $3.00. Bulls will need to push the price above this level to avoid a potential breakdown and invalidate the bearish head-and-shoulders pattern. If XRP can break out to the upside, there’s potential for a move to $3.40 and possibly even $5.00. However, if the price falls below $1.9447, a deeper correction could occur, with $1.00 as a key psychological support level to watch.

As always in crypto markets, volatility remains high, and traders should be cautious and monitor key levels for confirmation of the next move.