The price of XRP continues to recover from its recent low, recording a steady increase over the past few days. The upward trend has pushed the token above the descending parallel channel, where it had been held within the downtrend since January 16.

Over the past 24 hours, the price of XRP has increased by 6%, as growing demand could create strong momentum to regain the $3 level.

XRP Breakout: Bullish Reversal Signals Indicate Rising Demand

The 6% recovery of XRP yesterday has pushed its price above the descending parallel channel, which had led to its decline since January 16. This downward price pattern occurs when an asset forms lower highs and lower lows in two parallel downtrending trendlines.

If the price breaks above the upper trendline of the channel, it suggests a reversal or the start of an uptrend. This signals a positive shift in market sentiment towards XRP and could be an opportunity for upward momentum if demand is sustained.

Furthermore, the rising Chaikin Money Flow (CMF) of the altcoin indicates inflows of capital into the XRP spot market. At the time of writing, this indicator, which tracks the flow of money in and out of an asset, is above 0 at 0.08.

A positive CMF like this suggests mild buying pressure, implying that the accumulation of XRP is slightly stronger than distribution. If this trend continues, it could push the value of XRP higher in the coming days.

Furthermore, the increase in the open interest of the token in its futures market reflects a revival in demand for XRP. Currently, this figure stands at $1.24 billion, up 20% in the past five days, during which time the price of XRP has increased by 13%.

Open interest refers to the total number of outstanding derivative contracts, such as futures or options.

As observed with XRP, when the price of an asset rises along with open interest, it indicates strong market participation. It confirms the strength of XRP's uptrend, as new money is entering the market to support higher prices.

XRP is Being Controlled by the Bulls. Will Profit-Taking Begin?

XRP has successfully broken above the descending parallel channel, strongly confirming its price increase over the past few days. If the buying pressure continues and XRP continues to see new demand, it could extend the current rally and reach its ATH of $3.40.

On the other hand, if profit-taking continues, XRP may lose its recent gains and fall back within the descending parallel channel. In this scenario, the altcoin could trade at $2.13.