XRP Price Crash Imminent: Decoding the 3-Wave Correction and Bearish Signals
Recent days have witnessed a softening in XRP’s price action, with the token currently trading below the $2 mark after failing to sustain recent recovery attempts. This shift has tilted the near-term momentum in favor of sellers, particularly as price closes below key short-term dynamic support levels. A detailed technical analysis by CoinsKid on X highlights a developing corrective structure on the 5-day chart, suggesting a potentially pronounced bearish path for XRP if crucial price levels aren't reclaimed. This article delves deep into this analysis, exploring the implications of a three-wave correction and potential support levels for XRP investors.
Understanding the 3-Wave Correction in XRP
A technical analysis of XRP’s price movement since mid-2025 reveals an intriguing corrective sequence best understood through wave patterns. CoinsKid’s analysis indicates that what initially appeared as a corrective advance towards the moving average cluster on the 5-day chart ultimately lacked the strength to hold, encountering resistance at a marked sell signal. This failure to break resistance suggests a continuation of the downtrend.
The Significance of the ABC Wave Pattern
According to CoinsKid’s interpretation of the 5-day candlestick chart, XRP’s price action is currently tracing out a three-wave corrective move – an ABC pattern. This is significant because it implies that the recent bounce to $2.4 wasn't a genuine shift towards bullish control, but rather a retracement within a larger downward corrective pattern that still has further to unfold. Understanding these wave patterns is crucial for technical analysis and predicting potential price movements.
Loss of the CoinsKid Ribbon: A Key Bearish Indicator
A critical aspect of the analysis is the breach of the CoinsKid ribbon, a custom indicator on the 5-day timeframe. This ribbon, comprised of a band of moving averages, previously served as a reliable gauge of trend strength throughout most of 2025. Sustained trading above the ribbon indicated bullish control. However, XRP has consistently closed below this ribbon since the flash crash in October 2025, signaling a sustained control by sellers and reinforcing the broader bearish structure. This loss of support is a strong bearish signal for XRP.
XRP Price Chart Analysis
(Image: XRP Price Chart. Source: @Coins_Kid on X - This would be an image embedded in the blog post)
Multi-Year Trendline as a Downside Magnet
The bearish scenario outlined in the chart analysis points to XRP’s next significant area of interest around the ascending multi-year support trendline. Currently, this trendline converges in the $1.30 to $1.40 range. This ascending white trendline, visible on the 5-day chart and extending back to 2020, represents a zone where XRP has historically found strong demand during pullbacks. The highlighted green zone on the chart focuses on this crucial $1.30 to $1.40 range, acting as a potential floor for the price.
Potential for Further Decline
As of today, XRP is trading at $1.96, down 4.7% in the last 24 hours. CoinsKid projects that if the current corrective move continues, the XRP price could rotate lower from the descending resistance line and move towards this support area over the coming months. This would represent the final leg of an ABC wave correction that began after XRP reached a new all-time high of $3.65 in July 2025. This potential decline highlights the risks associated with XRP investment in the short term.
Invalidating the Bearish Scenario
According to the analysis, the only way to invalidate this bearish path and reduce the likelihood of revisiting the lower support region is a sustained move back above the 5-day ribbon. This would indicate a resurgence of bullish momentum and potentially signal a trend reversal. Monitoring this ribbon is therefore crucial for XRP traders.
Broader Market Context and XRP's Future
The current XRP price action needs to be considered within the broader cryptocurrency market trends. Bitcoin's performance, regulatory developments, and overall investor sentiment all play a role in influencing XRP's price. Recent volatility in the crypto market has contributed to the downward pressure on XRP, and continued uncertainty could exacerbate the situation.
The Role of Ripple and SEC Lawsuit
The ongoing legal battle between Ripple and the SEC continues to be a significant factor influencing XRP’s price. Positive developments in the lawsuit typically lead to price increases, while negative news can trigger sell-offs. Investors are closely monitoring the case for any updates that could impact XRP’s long-term prospects. The outcome of this lawsuit is a key catalyst for XRP's future.
Technical Indicators to Watch
Beyond the CoinsKid ribbon and the multi-year trendline, several other technical indicators can provide valuable insights into XRP’s price movement:
- Relative Strength Index (RSI): Helps identify overbought or oversold conditions.
- Moving Average Convergence Divergence (MACD): Indicates trend direction and potential momentum shifts.
- Fibonacci Retracement Levels: Identify potential support and resistance levels.
Conclusion: Navigating the XRP Downtrend
The technical analysis presented by CoinsKid suggests a potential for further downside in XRP’s price. The three-wave correction pattern, coupled with the loss of the CoinsKid ribbon and the proximity to the multi-year trendline, paints a bearish picture. However, it’s crucial to remember that technical analysis is not foolproof, and market conditions can change rapidly. Investors should exercise caution, conduct their own research, and consider their risk tolerance before making any investment decisions. Staying informed about the latest market developments and monitoring key technical indicators will be essential for navigating the potential XRP downtrend. The $1.30 - $1.40 support level will be a critical area to watch in the coming weeks and months.
Bears push price lower | Source: XRPUSDT on Tradingview.com (Image would be embedded here)
Disclaimer: This article is for informational purposes only and should not be considered financial advice. Always do your own research and consult with a qualified financial advisor before making any investment decisions.