The XRP price has risen by about 3% since the March 27 low of $1.31, and has reclaimed the $1.35 level. However, this increase seems more like the formation of a bear flag than the beginning of a real recovery, especially since broader market conditions are not cooperating.
Since the 12-month high of $1.60 on March 17, XRP has already corrected by 18%. The intraday increase looks positive at first glance, but the chart, derivatives, and on-chain data all point in the same direction.
Bear flag is forming while hidden bearish divergence is building up
The 12-hour chart shows that XRP is trading in a bear flag pattern. The flagpole formed during the 18% drop from $1.60 to $1.31 between March 17 and 27. The current 3% rise forms the flag section: an ascending channel that, according to technical analysis, is usually followed by a new decline that is approximately as large as the pole.
If the lower trendline of the flag breaks, this could cause a further decline of another 18% from the break point. The XRP price would then head towards the $1.08 area (highlighted later).
The Relative Strength Index (RSI), a momentum indicator, calls for extra vigilance. Between February 6 and March 28, the price forms a lower high on the 12-hour chart while the RSI makes a higher high.
This is a hidden bearish divergence, which often indicates the continuation of the existing downward trend rather than a reversal.
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The divergence has not yet been confirmed. Confirmation will follow if the next 12-hour candle closes below $1.35. If the price stays just above $1.35, the pattern is delayed.
Complete disconfirmation of the pattern only occurs above $1.60, the peak level of the flagpole. If the broader market continues to weaken, this pattern could be quickly confirmed.
Even without RSI, the data from the derivatives and spot market warns that this rise has little foundation.
Open interest rises, but hodlers reduce positions
Since the rise began, open interest in XRP has increased from $737,720,000 to $759,210,000, a rise of 2.9%. At the same time, the funding rate became less negative, from -0.011% to -0.003%. This means that more long positions are being opened during the bounce.
Rising open interest during a rise in a bear flag is usually a warning, not a bullish confirmation. It shows that some traders are betting on a further rise with leverage, but if the pattern reverses, these new longs can be quickly liquidated.
The spot market offers no counterbalance. The Hodler net position change, a Glassnode metric that tracks accumulation by long-term wallets (155 days or longer), remained stable at around 238 million XRP between March 19 and 25.
Since March 25, that balance has dropped to 229.78 million XRP, a reduction of approximately 8.25 million tokens or 3.47%.
Investors with conviction quietly reduce their positions just before the XRP price rises. If derivatives primarily bet on longs while spot holders exit, it benefits the bears.
If the RSI-driven hidden bearish divergence is confirmed and the price drops, there is too little support in the spot market to provide counter-pressure. It remains to be seen whether spot buyers will still step in as recent longs did. In that case, spot support could limit further declines.
XRP price expectation and the $1.35 test
The XRP price must close clearly above $1.35 on the 12-hour chart to delay the bearish pattern. Above that, $1.37 and $1.40 constitute the next resistances. However, it holds true: based on the bear flag pattern and the building divergence, any drop below $1.35 initiates the confirmation process.
If the flag breaks and loses the $1.31-$1.32 support area, an estimated decline of 18% from the break point is triggered. This targets the $1.08 area, the lowest level for XRP since early February 2026.
Only a rise above $1.60 would completely disprove the bearish pattern and end the lower-high pattern that characterizes XRP trading in 2026.
Now recapturing $1.35 is the difference between a delayed bearish scenario and a potential decline of 18% towards $1.08.