XRP is experiencing a significant rally, climbing from a low of $2.66 on 27 January to an intraday high of $3.21 on 28 January. This represents a 20% rebound, driven by regulatory advancements and favourable market conditions.
Ripple Gains Key US Licences
Ripple, the company behind XRP, announced the acquisition of Money Transmitter Licenses (MTLs) in New York and Texas. These states are known for their stringent regulatory requirements, and the licences mark a crucial step in Ripple’s push for compliance within the United States.
With the addition of these licences, Ripple now holds over 50 MTLs across the US. Globally, the company boasts more than 60 licences, including a Major Payment Institution Licence in Singapore and registrations in Ireland and the Cayman Islands.
XRP/USD daily chart. Source: TradingView
These licences are pivotal as they enable Ripple to legally facilitate cross-border payments for customers in key markets. By strengthening trust and compliance, Ripple has positioned itself to expand the use of XRP in real-world financial transactions, bolstering its appeal and boosting its price.
Market Impact: Shorts Wiped Out
XRP’s price surge has led to significant liquidations in the derivatives market, intensifying the upward momentum. Over $4.1 million worth of short positions were liquidated within 12 hours, compared to $847,000 in long liquidations.
This cascading liquidation effect has further fuelled the price rebound. Such events mirror activity seen between 13 and 16 January, when $56 million in short positions were wiped out as XRP soared 46% to a seven-year high of $3.40.
Bull Flag Pattern Suggests Further Gains
Technical analysis suggests XRP could extend its bullish trend, with a potential target of $4.62 in February. The daily chart shows a classic bull flag pattern, which is typically indicative of continued upward momentum if key support levels are maintained.
The bull flag formed following XRP’s rally from $2.27 on 10 January to $3.40 on 16 January, confirming a breakout from a larger symmetrical triangle. Currently, XRP is testing resistance at $3.10, the flag’s upper boundary. A decisive break above this level could trigger another rally.
Source: Ripple
The potential upside target of $4.62 is derived from the height of the previous rally, representing a 49% increase from the current price. The relative strength index (RSI), which measures momentum, has risen from 58 to 62 in the last 24 hours, signalling growing bullish sentiment.
Positive Outlook for XRP
XRP’s recent gains highlight the impact of Ripple’s regulatory advancements and the dynamics of the derivatives market. With strong technical indicators and increasing compliance achievements, XRP appears poised for continued growth.
Investors are closely watching whether XRP can sustain its momentum and break through key resistance levels, potentially setting new all-time highs in the coming weeks.
