XRP (XRP) has surged by more than 5% in the past 24 hours, as the crypto market continues to recover following a busy week that ended up catalyzing a strong move upwards.
On Tuesday, a failed vote to push the Clarity Act forward within the U.S. Senate triggered a strong drop across the crypto space.
However, the U.S. Securities and Exchange Commission (SEC) reassured the sector that it will continue to draft favorable regulations that help it expand its reach in the country.
Meanwhile, the Federal Reserve hiked interest rates as expected on Wednesday, and the market reacted positively as comments from the U.S. central bank gave analysts more clarity on what to expect for what remains of the year at least.
Odds of a second rate hike in December are now exceeding 90%, as the Fed’s Chairman, Kevin Warsh, reassured the institution’s commitment to lower inflation in the country via hawkish monetary policy actions.
Altcoins Surge Yesterday Triggered a $560M Short Squeeze
Now that uncertainty regarding the macroeconomic and legislative backdrop has eased, it appears that market participants are ready to keep the late-August rally going.
XRP has now surged for two days in a row, booking a 12% gain in the process. Other tokens, including Hyperliquid (HYPE), Zcash (ZEC), and Solana (SOL), have also experienced strong gains during this period, as investors started to pile into altcoins shortly after the Fed’s decision.
As a result, short liquidations spiked to $562 million yesterday and are sitting above $250 million in the past 24 hours alone, as a massive short squeeze seems to be unfolding.
For XRP alone, liquidations have stood above historical averages for the past 5 days or so, indicating an ongoing squeeze that could catapult the price above previous ceilings.
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See all Ripple forecastsXRP Offers Potential 46% Gain Following Bull Flag Breakout
Turning to the daily chart, we can see that a bullish flag pattern had been forming following the strong spike that XRP experienced in late August after the SEC released its new Rules for Crypto Assets proposal.
The flag’s downward slope indicated that sellers were outpacing buyers during this phase of consolidation. However, the price of XRP bounced off a key support area at $1.32 and quickly rose after briefly breaking below its 200-day exponential moving average (EMA).
Demand seems to have been strong enough at these levels to prompt a bullish breakout of this flag pattern. Since this is a continuation setup, we could expect the resumption of the uptrend that we saw in late August in the next few weeks.
A break above $1.50 should fully confirm that the rally is resuming. Using the flag’s pole size as a reference, we can project a price target of $2.10 for this altcoin. This means a 46% upside potential for the token in the near term.
The Relative Strength Index (RSI) confirmed a buy signal upon crossing above the signal line. This indicates that positive momentum is accelerating. A move above the 60 level would confirm that bulls are in control of the price action.
