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Could XRP’s Price Drop Further?

Recently, XRP has gone through extreme fluctuations in price, raising the question of whether it might experience a further dramatic crash. In this respect, XRP is down over 22% in the last month, slipping from $2.90 to $2.26 on January 10, powered by various factors that include profit-taking, strong U.S. economic data, and hawkish Federal Reserve policy. So, let’s check which key indicators will lead to supposition about its continued fall in price.

XRP coin with fluctuating price charts in the background.
Source: https://www.investopedia.com/crypto-exchanges-allow-xrp-trading-after-ripple-ruling-7561172

Symmetrical Triangle Suggests Potential 40% Drop

XRP has formed a symmetrical triangle in the daily chart, developing through converging trendlines. Such patterns usually express market indecision and provide a signal for either a strong upside or downside break.

As of January 10, XRP is trading near the triangle’s upper boundary, which has historically led to price declines. A drop toward the lower boundary, estimated around $2.05 (the 50-day EMA), is possible.

If XRP breaks below the lower trendline decisively, the price could plummet to $1.36, representing a 40% drop from current levels. This target is calculated by subtracting the triangle’s maximum height from the breakdown point near $2.18.

Whale Activity Signals Bearish Sentiment

Market data indicates that large XRP holders, or whales, are reducing their holdings. Addresses with at least 1 million XRP tokens now collectively hold 90.50 billion XRP, a record low compared to 100 billion last year.

This decline in whale holdings during price consolidation reflects growing bearish sentiment. The sell-off by these significant investors could add further downward pressure to XRP’s price.

Key Support and Resistance Levels

On the weekly chart, XRP has been consolidating within a price range of $1.98 to $3.03. These levels align with the 1.0 and 1.618 Fibonacci retracement lines, respectively.

XRP recently bounced off the $1.98 support level but has struggled to maintain upward momentum. Its weekly RSI remains above 70, signaling overbought conditions and an increased likelihood of a deeper correction.

Potential Scenarios:

  1. Bearish Scenario:
    • A decisive break below $1.98 could lead to a drop toward the 20-week EMA at $1.50.
    • This level, near the 0.786 Fibonacci retracement at $1.62, has previously acted as a correction target.
  2. Bullish Scenario:
    • If XRP holds above $1.98, a rebound toward $3 is possible.
    • This aligns with some optimistic forecasts, suggesting further upside potential if the market stabilizes.

Summary: Will XRP Crash Again?

XRP faces multiple bearish signals, including technical patterns and declining whale holdings. The symmetrical triangle pattern hints at a potential 40% drop if the price breaks below key support levels. Whale activity further underscores bearish pressure.

However, holding above $1.98 could provide some hope for recovery. Traders should monitor these critical levels closely to anticipate the next major price move.

XRP Price Scenarios at a Glance

Scenario

Price Target

Conditions

Bearish Breakdown

$1.36 – $1.50

Break below $1.98 and lower trendline.

Bullish Rebound

$3 – $3.46

Hold above $1.98 and breakout upwards.

By understanding these potential scenarios, investors can make informed decisions in this volatile market.

January 12, 2025 at 8:00 pm

Updated January 12, 2025 at 8:00 pm

Disclaimer

Remember, investing in cryptocurrencies involves risks, and it’s important to conduct thorough research and seek professional advice before making any financial decisions. (Please keep in mind that this post is solely for informative purposes and should not be construed as financial or investment advice.)

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