XRP Outpaces Crypto Market with a 50% Surge—Is $4 the Next Milestone?

XRP delivered a remarkable performance in January, rallying by over 50% and leaving the broader cryptocurrency market in its wake. What’s next Ripple’s coin that could?

The XRP surge has spurred optimism among traders and analysts, with some forecasting the token could reach as high as $4 in the coming weeks. But what exactly is driving XRP’s ascent, and is $4 truly within reach?

Ripple’s Regulatory Boost and Growing Institutional Adoption

XRP’s breakout can largely be attributed to a series of positive developments for its parent company, Ripple Labs. One of the most significant catalysts came in December when Ripple received approval from the New York Department of Financial Services (NYDFS) for its RLUSD stablecoin. The move upward managed to restore investor confidence and was a key milestone for Ripple’s ambitions in the regulated financial world.

XRP is awaiting breakout confirmation on 4-hour and 1-day charts, with a short-term target of $4. Source: Dark Defender via X

Additionally, the rally of XRP has been further fanned by Ripple’s growing exposure to the financial sector. The company recently received money transmitter licenses in Texas and New York, thereby strengthening its capability of operation in major markets in the United States. It is the case that increased permeation of the XRP cryptocurrency in institutional payment systems is inducing demand for the token, therefore reinforcing its bullish cycle.

According to Santiment, XRP has recently received wider recognition among major financial institutions. While its adoption as a payment solution is accelerating, for example, the partnership between Ripple and Ondo Finance to make tokenized U.S. Treasury securities possible on the XRP Ledger has opened new avenues for XRP integrations into traditional financial markets.

A Technical Breakout on the Horizon?

XRP’s technical chart is also pointing towards a potential breakout. According to renowned analyst Dark Defender, XRP is showing signs of preparing for an upward move. “The short-term target is at $4 with support at $3.07,” Dark Defender said while pointing out that XRP was only waiting for confirmation on the shorter time frames to trigger its next upward leg.

XRP is nearing breakout confirmation on short-term charts, eyeing $4 with support at $3.07. Source: Dark Defender via X

Meanwhile, the Bollinger Bands—an extremely popular volatility indicator—signal that XRP is ready for an explosive move. As crypto investor Armando Pantoja underlined, the tightening of these bands was a sign of an imminent breakout: “The volatility squeeze is signaling that XRP could see a significant price shift in the near future.”.

Traders are, however, warned to stay cautious as the recent XRP bounce from the low of $2.70 has created liquidity pockets that might be targeted by downward price action if market conditions change. With $3 serving as a critical support level, it remains to be seen whether XRP can hold its ground or face a retracement.

WATCH XRP PRICE ANALYSIS

$4 Target in Sight, But Challenges Persist

The continued fluctuations in the cryptocurrency market had the strong rally place XRP as one of the best performing this January. XRP surged 50% and outperformed Bitcoin’s 13% rally and Ether’s slight decline. XRP even outperformed the performance of other large-cap cryptocurrencies such as Polkadot, Solana, and Binance Coin.

Ripple’s XRP price is expected to bounce from $3 to rejoin the bullish rally targeting $4. Source: R2CTrading on TradingView

One of the main contributors to XRP’s resilience has been Ripple’s stablecoin play. The RLUSD stablecoin, which surpassed other prominent stablecoins in trading volume, has provided a fresh avenue for liquidity and broader market adoption. As of January 30, RLUSD’s daily volume reached $62 million, surpassing PayPal’s USD stablecoin, PYUSD, by a considerable margin.

The resignation of SEC Chairman Gary Gensler also played a pivotal role in XRP’s rise. Under new leadership, the SEC has signaled a more favorable stance towards the crypto industry, potentially benefiting Ripple in its ongoing legal battle with the commission. With speculation around a possible spot XRP ETF gaining momentum, JPMorgan analysts predict that such a fund could attract significant inflows, potentially boosting XRP’s price further.

Bearish Signals: Profit-Taking and Market Correction

Despite the optimism surrounding XRP’s potential, caution is warranted. Some on-chain metrics slightly point to the overvaluation of XRP and probable cases of profit-taking. Currently, the MVRV ratio for XRP is in positive territory, meaning many holders might look to cash in on recent gains. According to Santiment, the addresses holding between 10 million and 100 million XRP have recently been selling large chunks of their accumulation and might put downward pressure on its price.

Despite the bullish optimism, the XRP price still has room for a pullback near $2.13. Source: Jyoon012 on TradingView

If this setup continues, XRP might experience a retreat, and according to some analysts, it could slide back to $2.13 when the bears increase their selling pressure. If the buying pressure kicks in once more and profit-takers back down, XRP could blast higher through its present resistance levels for new all-time highs.

What’s Next for XRP in February?

Looking ahead, XRP’s immediate future remains uncertain but promising. The token has shown resilience in navigating both bullish and bearish forces, and its technical chart indicates that the next major target could be $4—a level that many traders are eyeing in the short term. While challenges like profit-taking and whale activity could weigh on XRP’s price, its growing adoption and the shifting regulatory landscape suggest that the token may continue to outperform its peers in the coming weeks.

Ripple (XRP) price chart. Source:XRP Liquid Index (XRPLX) via Brave New Coin

Ultimately, whether XRP reaches $4 or faces a correction will depend on a combination of market dynamics, investor sentiment, and external factors, including potential regulatory decisions and institutional adoption. As always, caution is advised, but the outlook for XRP in February remains one of cautious optimism.