XRP’s price witnessed a sharp rally today, climbing over 20% within 24 hours to reach $2.36. The surge follows news of Ripple’s significant political donation and increasing optimism over its legal battle with the US Securities and Exchange Commission (SEC). However, technical indicators suggest a potential bearish reversal, pointing to possible corrections ahead.

Ripple Donates $5M in XRP to Trump’s Inaugural Committee

Ripple’s price rally comes amid reports that the company plans to donate $5 million in XRP to US president-elect Donald Trump’s inaugural committee. The donation aligns with similar contributions by crypto exchanges Coinbase and Kraken, which each pledged $1 million.

Fox Business first reported Ripple’s donation, while The New York Times cited Ripple CEO Brad Garlinghouse hinting at the move. Industry observers speculate that these contributions may enhance the likelihood of a friendlier SEC under Trump’s administration, potentially easing regulatory pressures on Ripple and other crypto firms.

Ripple, Coinbase, and Kraken are all entangled in lawsuits with the SEC, with the regulatory body accusing Ripple of selling unregistered securities via XRP. Trump’s appointment of Paul Atkins, known for his pro-crypto stance, as SEC chair could mark a turning point in these ongoing legal battles. Investors appear to view Ripple’s donation as a strategic move, boosting XRP’s value.

Technical Indicators Signal Mixed Outlook

XRP’s rally aligns with key technical support levels, suggesting a temporary bullish momentum. On the 4-hour chart, XRP’s relative strength index (RSI) briefly dipped into oversold territory below 30, prompting buyers to drive prices higher. Additionally, the cryptocurrency found support near its 200-4H exponential moving average (EMA) around $2.00. This level coincides with a historically strong accumulation zone.

However, on the daily chart, XRP’s price shows signs of forming a descending triangle pattern. This bearish reversal pattern is characterised by a falling trendline resistance and horizontal trendline support. Analysts warn that a breakdown below the triangle’s horizontal support could lead to a significant decline, with a downside target of $1.77. This level, representing a 22.50% correction from current prices, aligns with the 50-day EMA.

Conversely, a breakout above the triangle’s upper trendline could invalidate the bearish outlook, potentially pushing XRP to its December high of $2.90.

Outlook Remains Uncertain

While Ripple’s political engagement and legal strategy have sparked investor optimism, the technical landscape suggests caution. The descending triangle pattern signals potential volatility, with XRP’s price likely to swing in either direction depending on upcoming market developments.

XRP holders will be closely watching for further news on Ripple’s SEC case and Trump’s administration’s approach to cryptocurrency regulation. For now, the market remains divided between bullish hopes for a regulatory breakthrough and bearish warnings of a possible correction.