Symmetrical Triangle Suggests Potential 40% Drop
XRP has formed a symmetrical triangle in the daily chart, developing through converging trendlines. Such patterns usually express market indecision and provide a signal for either a strong upside or downside break.
As of January 10, XRP is trading near the triangle’s upper boundary, which has historically led to price declines. A drop toward the lower boundary, estimated around $2.05 (the 50-day EMA), is possible.
If XRP breaks below the lower trendline decisively, the price could plummet to $1.36, representing a 40% drop from current levels. This target is calculated by subtracting the triangle’s maximum height from the breakdown point near $2.18.
Whale Activity Signals Bearish Sentiment
Market data indicates that large XRP holders, or whales, are reducing their holdings. Addresses with at least 1 million XRP tokens now collectively hold 90.50 billion XRP, a record low compared to 100 billion last year.
This decline in whale holdings during price consolidation reflects growing bearish sentiment. The sell-off by these significant investors could add further downward pressure to XRP’s price.
Key Support and Resistance Levels
On the weekly chart, XRP has been consolidating within a price range of $1.98 to $3.03. These levels align with the 1.0 and 1.618 Fibonacci retracement lines, respectively.
XRP recently bounced off the $1.98 support level but has struggled to maintain upward momentum. Its weekly RSI remains above 70, signaling overbought conditions and an increased likelihood of a deeper correction.
Potential Scenarios:
- Bearish Scenario:
- A decisive break below $1.98 could lead to a drop toward the 20-week EMA at $1.50.
- This level, near the 0.786 Fibonacci retracement at $1.62, has previously acted as a correction target.
- Bullish Scenario:
- If XRP holds above $1.98, a rebound toward $3 is possible.
- This aligns with some optimistic forecasts, suggesting further upside potential if the market stabilizes.
Summary: Will XRP Crash Again?
XRP faces multiple bearish signals, including technical patterns and declining whale holdings. The symmetrical triangle pattern hints at a potential 40% drop if the price breaks below key support levels. Whale activity further underscores bearish pressure.
However, holding above $1.98 could provide some hope for recovery. Traders should monitor these critical levels closely to anticipate the next major price move.
XRP Price Scenarios at a Glance
|
Scenario |
Price Target |
Conditions |
|
Bearish Breakdown |
$1.36 – $1.50 |
Break below $1.98 and lower trendline. |
|
Bullish Rebound |
$3 – $3.46 |
Hold above $1.98 and breakout upwards. |
By understanding these potential scenarios, investors can make informed decisions in this volatile market.
