XRP price path to $3.40 remains intact — Here is why

XRP Price Analysis: Bullish V-Shaped Recovery Targeting $3.40

XRP (XRP) is exhibiting strong bullish signals, forming a V-shaped recovery pattern on its weekly chart and experiencing a significant surge in open interest (OI). This positive price action is supported by several key indicators.

The OI, a measure of market sentiment, increased by 53% from $3.61 billion to $5.53 billion between May 8 and May 14, before settling slightly lower at $5.06 billion on May 16. This substantial rise in OI, historically preceding major XRP price rallies, strongly suggests bullish momentum. A similar OI surge preceded a 70% XRP rally in January 2025, reaching a seven-year high of $3.40.

Currently trading above $2.40 after a 2% dip in the last 24 hours, XRP has shown a 13% gain over the past two weeks, reflecting the broader cryptocurrency market recovery. While funding rates remain relatively neutral at around 0.0065%, indicating balanced sentiment, the overall picture points towards a bullish outlook.

The V-shaped recovery pattern, evident on the weekly chart since mid-January, indicates a sharp price increase following a steep decline. The completion of this pattern would see XRP reach the resistance level at $3.40, representing a potential 40% increase from the current price. For this to occur, bulls need to solidify $2.60 as support, paving the way for a move towards $3.00 and eventually the $3.40 neckline.

Further bolstering the bullish case, the Relative Strength Index (RSI) has risen from 43 to 56 over the past six weeks, signaling increasing bullish momentum. Analysts concur, with Egrag Crypto highlighting a potential retest of the $3.40 zone following a breakout from a descending triangle. Dom, another market analyst, emphasizes the importance of holding the $2.40 support level, above all VWAPs and major moving averages, for continued bullish price action. He notes a recent break of VWAP bands, a positive sign, but stresses the need for bulls to defend this support level.

While this analysis presents a bullish outlook, it’s crucial to remember that all investment decisions involve risk. Readers are urged to conduct thorough research before making any trading or investment choices.