XRP's (CRYPTO: XRP) recent range-bound price action has traders questioning whether a pullback may come before an eventual breakout.

Short Term Uncertainty

In a podcast on Tuesday, analyst Cryptoinsightuk outlined that XRP may see further downside toward $1 before a larger breakout, as traders weigh short-term uncertainty against a bullish long-term setup.

He added that XRP remains in a consolidation phase, with price compressing within a wedge-like structure. This setup leaves room for either an upside breakout or continued drift lower in the near term.

A move toward $1 by June remains possible, he added, as part of ongoing volatility compression. However, such price action often builds pressure for a stronger, more "explosive" moves higher.

Bullish Signals Build, Bottoming Phase?

Despite near-term uncertainty, Cryptoinsightuk said the broader outlook remains bullish.

Liquidity analysis shows significantly more liquidity positioned above current price levels than below, suggesting a higher probability of upside over time.

He also pointed to sentiment indicators, noting multiple weeks of negative funding, levels last seen during the 2022 bear market lows, which often signal late-stage downtrends rather than the start of new ones.

Cryptoinsightuk said current conditions resemble previous market bottoms, supporting the view that the market may be entering a bottoming phase.

He added that macro catalysts, including regulatory clarity, monetary easing and improving liquidity, could drive the next move higher.

While further downside or extended consolidation cannot be ruled out, he said the risk-reward profile favours upside, with potential gains outweighing remaining downside risk.

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