- XRP investors realized nearly $800 million in profits on Wednesday following its recent 20% rise.
- Options traders are preparing for the possibility of XRP reaching the $5 mark.
- XRP could rally as high as $4.75 if it breaks above the upper boundary of a flag channel.
Ripple’s XRP continued its rally on Wednesday as it looks to test the upper boundary of a key flag channel. Following the recent price rise, investors booked profits worth nearly $800 million while options traders bet on the remittance-based token hitting the $5 mark.
XRP options suggest bullish momentum amid profit-taking among investors
XRP has surged over 20% since Tuesday after Ripple announced it received approval to launch its RLUSD stablecoin. Since recovering from the dip just below $2, investors have booked nearly $800 million in profits. This developing trend of high profit-taking upon any major price rise could slow down XRP’s bullish momentum.
XRP Network Realized Profit/Loss | Santiment
Additionaly, XRP’s weekly active addresses have also begun to taper off, declining from 496K last week to 341K on Wednesday. This signals lesser on-chain activity and investor interest for XRP.
XRP Weekly Active Addresses | Santiment
Meanwhile, the XRP options market shows that traders favor an upside move, with the $5 call being the second-most traded XRP option, according to Amberdata, CoinDesk reported.
The $5 call on options exchange Deribit also hosts a notional open interest of $1.25 million — the highest among out-of-the-money calls. Out-of-the-money calls are option contracts with a higher strike price than the underlying asset’s market price.
Ripple’s XRP bull flag signals rally toward $4.75
XRP is posting a bull flag following its recent consolidation in the past few days.
This pattern is formed by a sharp price increase known as the flagpole, followed by a consolidation that resembles a flag before a breakout occurs.
XRP/USDT daily chart
If XRP sustains a high volume above the upper boundary of the flag channel, it could signify the continuation of its rally with a maximum profit target near $4.75. However, it must first overcome the resistance near the $3.00 psychological level to complete such a move.
The Relative Strength Index and Stochastic Oscillator momentum indicators are above their neutral levels and trending upward, indicating dominant bullish sentiment.
A daily candlestick close below $1.35 will invalidate the thesis and send XRP toward $0.93.