NOIDA (CoinChapter.com) — Despite market volatility, XRP prices have shown resilience, holding steady at around $2 despite falling nearly 14% in recent trading rounds. The token faces uncertainty as the U.S. Securities and Exchange Commission (SEC) continues its legal battle with Ripple Labs.

The SEC’s potential appeal of its July 2023 ruling that Ripple’s programmatic XRP sales to retail investors on public exchanges did not violate securities laws may be the reason for XRP’s recent decline. With expected regulatory changes under the new SEC leadership and increased discussions about the possibility of an XRP spot ETF, this appeal could be a major catalyst affecting XRP’s market momentum in the coming months.

XRP price fails to break out of bullish pattern
Meanwhile, the XRP/USD pair failed to break out of a bullish technical pattern known as a bullish flag, as the upper trendline of the pattern provided resistance to XRP price action. This rebound could also be the reason why the Ripple token has fallen by more than 14% since December 25.

The bullish flag is a common continuation pattern in technical analysis that indicates that a strong uptrend is likely to resume. The pattern consists of two parts: the pole and the flag. The pole is formed after a steep, nearly vertical bounce driven by aggressive buying pressure. This is followed by a consolidation phase, forming the flag.

During this phase, the price trades within a narrow downward sloping or sideways channel. Traders take profits temporarily but bulls remain in control, preventing a major decline.

The consolidation reflects market participants rebuilding their positions to create a foundation for the next leg up. Importantly, the selling pressure during the flag phase is relatively light, indicating that the uptrend remains intact.

When a breakout occurs at the upper border of the flag, the prior uptrend will continue. The breakout volume is key to confirming the pattern, indicating a renewed strengthening of bullish momentum.

The price target for a bullish flag breakout is calculated by adding the length of the flagpole to the breakout level. Applying this to XRP’s current formation, with the flagpole originating from its recent vertical bounce, suggests a potential price target of nearly $5.73 – 1,84% above current levels.

However, bulls need to restart the rally to test the flag’s resistance again. A settlement of Ripple’s lawsuit with the SEC or a soft stance from the new chairman could help add a tailwind to the coin’s sailing.

EMA resistance becomes the next target for bulls
Meanwhile, bulls face a tough task as the 20-day EMA (red wave) resistance near $2.21 has proven difficult to break. Despite a small gain of nearly 5% on Dec. 31 that took the coin to a daily high of around $2.15, XRP’s price action seems to remain firmly in the hands of bears.

A breakout above the imminent resistance will put XRP price on the path to target close to $2.6, which could be followed by a correction to pair the gains.

On the other hand, a reversal and a break below the pattern will force the coin to test the support near $1.6. Additionally, the failure of the immediate support could lead the XRP price to drop to the support near $1.28.

XRP’s relative strength index (RSI) remains neutral, approaching 49.53 on the daily chart.