Is XRP price going to crash again?
XRP (XRP) is down more than 25% three weeks after hitting $2.90, its highest level since January 2018, and trading as low as $2.13 on December 23.
Overbought levels of XRP and the Federal Reserve's hawkish stance have been the primary reasons for the decline.
Let's check if the price of XRP can drop further in the coming days.
XRP has a risk of going down 15-20% during the holidays.
XRP price has been consolidating in the Fibonacci retracement range since early December, with the 1.618 Fib level near $3 serving as resistance and the 1.0 Fib level near $1.98 as support.
As of December 23rd, XRP has entered a correction phase after failing to break through the $3 resistance, reaching support at $1.98 – roughly 15% below its current price – by the end of December.
The bias is reinforced by the Relative Strength Index (RSI) on XRP's weekly chart, which remains above 70, suggesting overbought conditions and the recent uptrend may be reduced or reversed.
XRP whales are locking in profits.
Meanwhile, XRP's richest addresses show continued growth.
Notably, the supply of XRP in addresses holding at least one million tokens decreased throughout December, coinciding with a consolidation phase during the same period.
When large holders (whales) reduce their XRP holdings, it indicates that significant investors are taking profits or exiting positions. This sale will increase the supply of XRP in the market, which, if there is not enough buying interest, will put downward pressure on the price.
XRP's downward triangle suggests a 20% decline
XRP appears to be forming a descending triangle pattern on the daily chart, suggesting a bullish outlook for the cryptocurrency. Appearing at a high, this technical setup indicates a potential hidden reversal.
In XRP's case, the horizontal support level is near $2.19, while the trend connecting lower highs extends to the downside. A critical break below the $2.19 support could confirm the descending triangle, which could lead to further price declines.
The technical target of the pattern is calculated by measuring the peak height of the triangle and subtracting it from the rally point, which shows a possible drop to $1.69. This target corresponds to the 50-day exponential moving average (50-day EMA; red wave).
Conversely, from the lower transition line of the triangle, XRP may test the upper trend line around $2.50 as the next upside target. A clear break above the upper trendline could invalidate the bearish reversal configuration, which would instead put XRP on track to test the yearly high at $2.90.
XRP Bull Flag Can Overturn Bears With 60% Crash.
XRP's current consolidation, which could result in a short-term price correction, could shake out weak hands, allowing new buyers to enter at lower price levels. Many analysts predict that this overall trend may continue to improve.
For example, analyst Bark sees XRP consolidating under a bullish flag, predicting that the price will rise to $3.50 in January 2025. This is about 60% higher than the current price level.
During Donald Trump's presidency, SEC vs. Ripple will receive additional support from bullish fundamentals such as a possible conclusion to the lawsuit and the launch of a spot XRP exchange-traded fund (ETF).
Related: XRP Price Chart ‘Bull Flag' Targets $15 Despite Consolidation Phase
Further fueling market sentiment is the rumor that Bitstamp will exchange crypto derivatives on the XRP Ledger, increasing XRP usage and potentially fueling speculative demand.
“XRP will 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 business activity involves risk, and readers should do their own research when making a decision.