XRP Price Warning: Why a 20% Crash to $1.70 Looms
The cryptocurrency market is always full of potential moves, and for XRP holders, recent signals point towards caution. Let’s dive into why XRP price might be heading for a significant dip.
Understanding the XRP Price Risk Factors
Several factors are aligning to suggest potential downside pressure on the XRP price. Analyzing chart patterns and on-chain data provides insights into these risks.
The Inverted V-Shaped Pattern
Looking at the daily chart, XRP has formed what appears to be an inverted V-shaped correction pattern. This typically follows a sharp rise and indicates a quick reversal as profits are taken. XRP surged from $1.61 but was met with strong resistance near $2.65, leading to the current downturn. Completing this pattern could see the price fall towards the $1.70-$1.72 area, representing about a 20% drop from recent levels.
Bearish Signals from Technical Analysis
Beyond the price pattern, other technical indicators support a bearish outlook. The Relative Strength Index (RSI) on the daily chart has been decreasing, showing growing downward momentum. On the weekly chart, a bearish divergence is evident. While XRP price has made higher lows over a period, the weekly RSI has made lower lows. This divergence suggests weakening upward strength and increased selling pressure at local highs.
Declining XRP Ledger Activity Signals Less Demand
On-chain data provides another piece of the puzzle. Activity on the XRP Ledger has seen a sharp decline over the past two months. Key metrics like Daily Active Addresses (DAAs) have dropped significantly from their year-to-date peak. Similarly, the number of new addresses joining the network has also decreased. This reduction in network activity typically signals lower user engagement and potentially less demand for XRP, which can negatively impact its price.
Expert Views on the Potential Downturn
Analysts are also observing these trends. One analyst, MasterAnanda, noted the reducing bullish momentum and breakdown from a rising channel on the XRP chart. They highlighted three consecutive daily closes below a key trendline, suggesting the correction might not be over and that the price could continue falling until it finds support around $1.72.
Key Takeaways on XRP’s Outlook
- An inverted V-shaped pattern on the daily chart suggests a potential 20% drop.
- A bearish divergence on the weekly RSI indicates increasing downward momentum.
- Declining daily active addresses and new addresses signal reduced network activity and demand for XRP.
- The convergence of these factors points to a possible price target around $1.70.
While the crypto market is volatile and reversals can happen quickly, the current technical and on-chain signals suggest that XRP price faces significant downside risk in the near term. Investors should consider these factors as part of their analysis.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
