XRP Eyes Recovery to $1.55 as RLUSD Market Cap Grows by 50%

XRP has been the top-performing asset in the top 5, with a 36% gain, despite the overall crypto market struggling to reignite its rally due to macroeconomic concerns. Inflation data from the United States for August was in line with market expectations, showing a 3.4% increase over the last year. However, even with a month-on-month rise that exceeded estimates by 20 basis points, the market rallied strongly following the report, as the likelihood of a September rate hike reached 87%.

Although multiple tokens broke above key resistances, they didn't sustain their gains. This was identified as a false breakout, leaving bulls trapped. Even though the late-August rally still holds, it highlights the high volatility in the crypto market, with investors still unsure if the bearish cycle is over. Exchange-traded funds (ETFs) tied to XRP have attracted only $32 million this month, suggesting a potential 62% drop compared to last month's inflows, but still higher than June and July.

The use of Ripple USD (RLUSD) has surged since the August rally, with its market cap increasing from $1.6 billion to $2.4 billion in just a month, suggesting growing usage. Ripple has been concentrating on expanding its prime brokerage business, recently securing $290 million. This development could contribute to higher volumes for RLUSD.

The formation of a bull flag pattern on the daily chart following the August rally suggests the market is entering a consolidation phase. While yesterday's spike failed to break this pattern, XRP bounced off $1.32 and may soon recover. The Relative Strength Index (RSI) currently sits at 53, indicating positive momentum for bulls as long as XRP stays above the $1.32 resistance.

For XRP to resume its upward trajectory, it needs to break out of the flag pattern, and a bullish catalyst, like recent SEC news on crypto regulations, might be needed to kickstart the next bull market.