XRP Price Crash Imminent? Analyst Warns of Potential Drop Below $1
XRP, a leading cryptocurrency often discussed for its potential and partnerships, is currently facing significant bearish pressure. The altcoin has retraced nearly 50% from its multi-year high of $3.66, now trading below the crucial $2 level. Veteran analyst Peter Brandt warns this technical setup carries “bearish implications” for XRP’s price, potentially leading to a further decline. This article delves into the technical analysis, market sentiment, and potential support levels that could dictate XRP’s future trajectory. We’ll explore the factors contributing to this downturn and what investors should watch for in the coming weeks and months.
Key Takeaways: XRP’s Current Predicament
- XRP appears increasingly bearish below $2, with technical indicators pointing towards a potential test of the $1 support level.
- A successful defense of the $1.78 support could invalidate the bearish outlook, offering a glimmer of hope for bulls.
- The possibility of a “double top” pattern formation raises concerns about a more substantial correction.
Is the XRP Top In? A Technical Analysis
XRP’s recent technical performance suggests its inability to maintain support above $2 puts the altcoin at risk of a deeper correction. Peter Brandt, a well-respected figure in the trading community, highlighted the emergence of a “potential double top” pattern on XRP’s charts. This pattern, if confirmed, historically signals a reversal of an uptrend and could see XRP’s price fall lower in the coming weeks or months.
The double top pattern is currently visible on the weekly chart. Confirmation will occur if XRP closes the week below the neckline at $2. However, Brandt acknowledges the possibility of a “bear trap” – a false signal that could see the price reclaim the neckline and invalidate the bearish case. “Sure, it may fail, and I will deal with this if it does,” Brandt stated, emphasizing the need for caution but maintaining a bearish stance “But for now this has bearish implications.”
XRP/USD weekly chart. Source: Peter Brandt
Potential Price Targets: Where Could XRP Fall?
If XRP remains below the $2 neckline, analysts predict an initial drop to $1.65, where the 100-week simple moving average (SMA) currently resides. This SMA could act as a temporary buffer. However, a breach of this level could lead to a further decline, with the 200-week SMA around $1.07 representing the last significant line of defense for XRP. This highlights the potential for a substantial correction if the bearish momentum continues.
Analyst XForceGlobal attributes the bearish shift to a wave 3 corrective move, part of a “5-wave impulse after the triangle breakout.” According to their analysis, XRP could fall towards the $1.20-$1.35 area in a final pullback. This pullback, they believe, will “determine everything needed for the next expansion phase.”
XRP/USD four-hour chart. Source: XForceGlobal
Recent reports indicated that the odds of XRP/USDT falling to the October 10th low of $1.25 increased after the price turned down from the 20-day moving average around $2. This further reinforces the growing bearish sentiment surrounding XRP.
Echoes of 2018: A Fractal Setup?
Interestingly, XRP’s current market structure closely mirrors the setup that preceded its 2018 bear market breakdown. The $2 region is behaving similarly to the last support level XRP lost before experiencing a 70% plunge seven years ago. This historical parallel is raising concerns among investors and analysts.
With prices struggling to stay above $2 and sellers gaining control, XRP has the potential to drop another 70% towards $0.60, before potentially recovering to stabilize around $1. This scenario would mirror the pullback that followed a similar technical setup in 2018. The comparison to the 2018 fractal is a significant warning sign for XRP holders.
Weakening Momentum: Derivatives and On-Chain Data
Adding to the bearish narrative, XRP is facing renewed downside pressure due to weakening derivatives activity and unfavorable on-chain positioning. These factors suggest a lack of strong buying support and an increasing likelihood of further price declines, potentially pushing the XRP/USD pair towards the $1 mark. The combination of technical analysis and on-chain data paints a concerning picture for XRP’s short-term prospects.
A Glimmer of Hope: Key Support Levels to Watch
Despite the prevailing bearish sentiment, XRP still trades above a critical support level that bulls must defend to prevent further downside. Glassnode’s UTXO realized price distribution (URPD) – a metric indicating the average prices at which XRP holders bought their coins – reveals the next significant support sits at $1.78. Approximately 1.85 billion XRP were previously acquired at this level, suggesting a potential demand zone.
XRP: UTXO realized price distribution (URPD). Source: Glassnode
Mikybull Crypto emphasizes the importance of holding this support line, stating, “XRP needs to hold this support line. Otherwise, it’ll be carnage.” The $1.70-$1.80 demand zone on the monthly timeframe is considered crucial for preventing a more significant collapse.
XRP/USD monthly chart. Source: Mikybull Crypto
The Ripple Effect: Market Context and Future Outlook
The current XRP price action is occurring within a broader context of volatility in the cryptocurrency market. Macroeconomic factors, regulatory developments, and overall investor sentiment all play a role in shaping price movements. While XRP faces specific challenges, it's important to consider the wider market environment.
Looking ahead, the next few weeks will be critical for XRP. The ability to defend the $1.78 support level will be a key indicator of whether the bulls can regain control. If the price breaks below this level, a further decline towards $1 and potentially lower becomes increasingly likely. Investors should closely monitor the technical indicators, on-chain data, and market sentiment to make informed decisions.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investing in cryptocurrencies involves significant risk, and readers should conduct thorough research and consult with a qualified financial advisor before making any investment decisions. The cryptocurrency market is highly volatile, and prices can fluctuate rapidly. Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information presented in this article.
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