XRP price could drop another 30% amid increased exchange flows.
XRP (XRP) is at risk of falling below $1 as the weak technical setup combined with increased inflows into exchanges.
Main Receptors:
XRP is facing upside resistance at $1.42
XRP's 13% rally between Saturday and Sunday to $1.43 hit a defensive wall at $1.39-$1.43, leading it back to its current price of $1.34.
A heat map of the price-based distribution shows that there is a large supply pool in this area, with 1.48 billion XRP found in the last 30 days. This indicates a strong resistance area for XRP, limiting the upside potential.
The daily XRP price chart below shows that this area coincides with the congruent triangle upper trend line that has suppressed the price since February 1st.
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The XRP/USD pair is trading below the triangle lower trend line at $1.35. A daily candlestick below this level confirms a symmetrical triangle, clearing the way for a deeper correction.
Calculated by adding the height of the triangle to the breakout point, the broad chart pattern target is $0.95, which is 29% below the current level.
According to Cointelegraph, a break and close below the lower boundary of $1.20 from the falling channel puts it at risk of breaking the February 6 low of $1.11. XRP may fall to psychological support at $1.
Analyst BitGuru commented on the support level at $1.20-$1.22:
“If this holds and buyers come in, a return to $1.80-$2.20 could happen quickly, signaling the start of a recovery.”
Meanwhile, the two-day chart dropped to $0.80 on the play, driven by selling from whales.
The supply of XRP on the exchange will rise
Last week, more than 472 million XRP, about $ 652 million, was transferred to Binance, which indicates the highest flow to the exchange in February, according to data source CryptoQuant.
Moving tokens to exchanges usually indicates a willingness to sell or at least bring the amount of money closer to the market.
“Such flows reflect a more defensive stance than investors who typically hold XRP,” CryptoQuant analyst Darkfost said in a QuickTake note on Monday.
“When the volume of such flows is recorded, they can create the conditions for a sudden wave of selling that can affect price action in the short term.”
As a result, the XRP balance on Binance increased from 2.55 billion to 2.73 billion tokens in mid-February. This represents a total growth of 180 million (+7%) in less than three weeks.
Increasing supply of XRP on exchanges is a classic bearish sign of increased selling pressure over demand.
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