XRP/US Dollar Pair Forms Bullish Flag Pattern, Targeting 29% Rally to $3.01

On May 26, 2025, the XRP/US Dollar pair formed a bullish flag pattern on the 4-hour chart. A bullish flag pattern appears when a sharp price rally is followed by a downward-sloping consolidation, typically between two parallel lines.

May 26, 2025 - A bullish flag pattern appears when a sharp price rally is followed by a downward-sloping consolidation, typically between two parallel lines. It often signals that the price may continue rising once the pattern confirms.

After a strong rally from the March 13 low of $1.536 to reach highs of around $2.33 on May 14, XRP formed a bullish flag as it slid from the highs.

The price is currently testing the lower red trendline of the bullish flag. If the price breaks out of the bullish flag, it could rally approximately 29% from the current price of $2.34 to the projected target of $3.01.

Moreover, XRP is currently trading just below the 50-period Exponential Moving Average (EMA) at $2.36, which now acts as dynamic resistance. A breakout above both the EMA and the upper red trendline may trigger the expected continuation.

Meanwhile, the Relative Strength Index (RSI), a momentum indicator, stands at 49.13, just below the neutral 50 level. The RSI line is curving upward, indicating improving momentum. If the RSI manages to climb above 50 with strong volume, it would support the bullish flag confirmation.

As for trading volume, it remains moderate at 305.34K, with no significant spikes yet. However, any increase in volume during a breakout could validate the move toward $3.01.

In short, XRP is consolidating in a bullish flag. If it breaks above the resistance and EMA with strong volume, a 29% rally toward $3.01 may follow.

XRP-Bitcoin Correlation Drops to 0.4, Raising Short-Term Price Pressure Risks

On May 26, the correlation coefficient between XRP and Bitcoin dropped to 0.40, reaching its lowest level since February 2025. A correlation coefficient measures the degree to which two assets move in relation to each other, with 1 indicating perfect correlation and 0 indicating no correlation.

A 0.4 reading shows that XRP is becoming increasingly disconnected from Bitcoin’s price action. In the short term, this divergence could increase the possibilities for sharper price fluctuations in either direction.

Historically, this kind of decoupling has had negative consequences. For example, the last time the correlation dropped to this level, XRP’s price fell by 22.33%, highlighted by the green zone in the chart below.

This decoupling comes at a time when Bitcoin has hit a new all-time high. Typically, altcoins like XRP benefit from Bitcoin’s strength, especially when it’s making new highs. However, the current divergence suggests XRP may not benefit from Bitcoin’s upward momentum. This weakening link could indicate reduced investor confidence or shifting capital to other altcoins.

Despite this, on-chain data points to growing investor conviction. The supply of XRP that has remained unmoved for 3–6 months has increased steadily in May, as highlighted by Glassnode. This signals that short-term holders are maturing into mid-term holders, suggesting a more stable and less speculative investor base.

Therefore, while technical correlation weakens and near-term price risk increases, holding behavior implies a longer-term confidence among XRP investors.

Dormant XRP Supply Hits 12.3 Billion, Signals Rising Long-Term Confidence

From mid-March to late May 2025, the total supply of XRP last active 3 to 6 months ago climbed steadily from 8 billion to 12.3 billion tokens, according to Glassnode data.

This metric tracks coins that have not moved for three to six months, and its increase suggests that more holders are choosing not to sell. These investors are either waiting for a better exit price or signaling long-term confidence in XRP’s outlook.

While XRP’s price (black line) showed moderate volatility during this period, the green line representing dormant supply moved consistently upward. This divergence suggests that the recent sideways or slightly bearish price action has not shaken holders with mid-term conviction.

This kind of behavior often reflects a maturing investor base. When supply remains untouched for months, it reduces short-term circulating supply, potentially limiting sharp selloffs during volatile periods.