XRP Battles Key Resistance as Market Eyes $4.20 Breakout Potential

• XRP must close above $2.83 to confirm strength, potentially targeting $4.20 if bullish momentum sustains.
• Strong support lies at $2.2321, aligned with the 0.888 Fibonacci retracement, crucial for sustaining bullish sentiment.
• Failure to hold support could trigger a drop to $1.5706, but EGRAG suggests it may be a bear trap before recovery.

XRP Price hovers near the lower boundary of its ascending Blue Channel. According to Egrag Crypto, the digital asset has established equilibrium, signaling a potential bounce. With resistance at $2.83, a breakout could drive XRP toward $4.20. However, failure to sustain key support levels might invite bearish pressure, forcing a reassessment of the market outlook.

Optimistic Momentum Signals Potential Upside

XRP must close above $2.83 to confirm macro strength. This level serves as a vital resistance, and surpassing it could trigger an upward rally. The next key target is $4.20, aligning with the upper boundary of the Blue Channel. If momentum sustains, these targets could shift higher, reinforcing a bullish market structure.

Moreover, volume activity at 4.76 million suggests growing investor interest. With a recent swing high near $3.28, a move past resistance may set the stage for further gains. Besides, the green moving average line reflects an overall positive trend, supporting potential upside.

Conservative Approach Highlights Strong Support Levels

There is still a chance for a retest of the previous daily low (PDL) around $2.2321. This level strengthens important support because it corresponds with the 0.888 Fibonacci retracement. By staying above this region, bullish mood might be maintained and additional falls could be avoided.

If XRP stabilizes, traders should monitor key levels. The previous daily high (PDH) at $2.40 and the previous weekly high (PWH) at $2.97 could serve as immediate targets. Additionally, the previous monthly high (PMH) at $3.07 strengthens the case for a structured uptrend. The higher the closing price, the stronger the technical outlook.

Bearish Risks and a Possible Market Trap

Should XRP fail to hold above the 0.888 Fibonacci level, further declines could occur. A drop toward the 0.786 Fibonacci level at $1.5706 remains a possibility. However, Egrag Crypto suggests that this may act as a bear trap rather than a confirmed downtrend.

Additionally, a break below key levels may coincide with Bitcoin retesting $70K. If this scenario unfolds, it could present a unique accumulation opportunity before a broader market recovery. However, if bearish pressure persists, the market may unknowingly enter a prolonged downturn.