Is XRP price going to crash again?

1 day ago 3

XRP (XRP) has dropped by over 25% three weeks after hitting $2.90, its highest level since January 2018, and was trading for as low as $2.13 on Dec. 23.

Profit-taking due at XRP’s overbought levels and the Federal Reserve’s hawkish pivot have been the primary reasons for the price decline.

XRP, Markets, Tech Analysis, Market Analysis, Altcoin Watch

Let’s examine whether XRP’s price could drop further in the coming days.

XRP risks 15-20% drop during the Holidays

XRP price has been consolidating within a Fibonacci retracement range since early December, with the 1.618 Fib level near $3 acting as resistance and the 1.0 Fib level near $1.98 serving as support.

As of Dec. 23, XRP has entered a correction phase after failing to break above the $3 resistance, potentially eyeing a drop toward the $1.98 support—approximately 15% below its current price—by December’s end.

The bearish bias is reinforced by XRP’s weekly chart relative strength index (RSI), which remains above 70, signaling overbought conditions and a possible slowdown or reversal in its recent uptrend.

XRP whales are locking profits

Meanwhile, XRP’s richest addresses show a growing distribution.

Notably, the XRP supply in addresses holding at least a million tokens has declined throughout December, coinciding with the consolidation phase in the same period.

When large holders (whales) reduce their XRP holdings, it signals that significant investors are taking profits or exiting positions. This selling increases the supply of XRP in the market, which, without sufficient buying demand, can put downward pressure on the price.

XRP’s descending triangle hints at 20% drop next

XRP appears to form a descending triangle pattern on the daily chart, suggesting a bearish outlook for the cryptocurrency. When emerging during an uptrend, this technical setup signals a potential bearish reversal.

In XRP’s case, the horizontal support level is near $2.19, while the trendline connecting the lower highs extends downward. A decisive break below the $2.19 support could confirm the descending triangle, potentially leading to a further price decline.

The pattern’s technical target is calculated by measuring the maximum height of the triangle and subtracting it from the breakdown point, indicating a possible drop toward $1.69. This target aligns with the 50-day exponential moving average (50-day EMA; the red wave).

Conversely, a bounce from the triangle’s lower trendline could have XRP test the upper trendline at around $2.50 as the next upside target. A clear breakout above the upper trendline will likely invalidate the bearish reversal setup, setting XRP on the path to retesting its yearly high at $2.90 instead.

XRP bull flag could topple bears with 60% breakout

XRP’s current consolidation, which could result in a short-term price correction, may shake out weaker hands, allowing new buyers to enter at lower price levels. This could resume the overall uptrend, as multiple analysts predict.

For instance, analyst Bark sees XRP consolidating inside a bull flag pattern, anticipating the price to boom toward $3.50 by January 2025. That is up approximately 60% from the current price levels.

The upside outlook receives further support from optimistic fundamentals, such as the potential conclusion to the SEC vs. Ripple lawsuit under Donald Trump’s presidential tenure and the potential launch of spot XRP exchange-traded funds (ETF).

Further fueling market sentiment are rumors that Bitstamp may develop a crypto derivatives exchange on the XRP Ledger, enhancing XRP’s use case and driving increased speculative interest.

“XRP gonna make history next year,” read Bitstamp’s official X handle in a Dec. 21 post.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Read Entire Article