XRP, a type of cryptocurrency used for transactions and payments on the XRP Ledger, has been facing challenges lately. Its price has dropped below important levels that were supposed to support it. This has raised concerns about whether its price could fall further, possibly reaching as low as $1. Analysts are keeping a close eye on the situation as trading activity increases and signals showing weakness in its price trend become clear.
Why Are Experts Worried About XRP?
XRP’s price is currently around $1.88 after it fell below $1.93, which was previously a support level. When a support level is broken, it often means the price may struggle to rise again, because the old support now becomes resistance – making it harder for the price to go back up. Over the past 24 hours, the value of XRP dropped nearly 6%, and over the past week, it has gone down more than 8%. Meanwhile, the amount of XRP being actively traded has risen sharply – by 87% in just one day. Now, trading activity has crossed $3.6 billion. This could mean either big players are selling or many people are rearranging their investments.
A crypto analyst who goes by the name Cheds Trading noted something concerning about the XRP price chart. He said it might be showing a pattern known as a “rounding top or M with higher high.” To simplify, these patterns sometimes suggest that a cryptocurrency could be preparing for a bigger drop in price. According to him, XRP might head toward around $1 next, which aligns with the area around the 200-week moving average (MA). A moving average is a calculation used to smooth out price trends. For example, the Exponential Moving Average (EMA) looks at recent prices and gives more weight to fresh data, while the Simple Moving Average (SMA) treats all past prices equally.
Signs of Weakness in XRP’s Price Trend
On XRP’s weekly price chart, it has fallen below important lines like the 8 EMA, 34 EMA, and 50 SMA. These are tools traders use to understand price trends. Crossing below these lines can signal that XRP is in a weak position. Another tool used by traders is Bollinger Bands, which help measure price and volatility. Recently, the Bollinger Bands for XRP have started widening, which usually signals increased price movements. However, the price of XRP remains below the middle of the bands, which is further evidence of weakness.
Crypto analyst Ali Martinez explained that XRP’s movement since July isn’t looking good. Back in July, XRP hit its peak price of $3.65. Since then, it has been creating lower highs and lower lows, which means a steady downward trend. He highlighted $1.92 as an important level for XRP to stay above. If it dips below this level, it could head to $1.
What About Short-Term Price Predictions?
Another chart from ChartNerd looks at XRP in the short term and shows it is following a pattern inside a descending channel. A descending channel is when a price moves downward inside two parallel lines. Right now, XRP is testing the lower edge of this channel, which is near $1.87–$1.90. This area also overlaps with what traders call a “demand zone,” meaning it could see a bounce back if enough buyers step in. However, it’s not guaranteed.
Large XRP Holders Are Selling
Ali Martinez reported that large holders of XRP, known as whales, have sold a big amount of their XRP holdings recently. Over the past four weeks, as much as 1.18 billion XRP has been sold, and in the last week alone, 280 million tokens were sold. Additionally, CryptoPotato explained that over $1 billion in XRP has been sold by these large investors. These sales lead to higher selling pressure, meaning there’s less demand and more supply – another reason why XRP’s price is struggling.
Crypto expert Niels mentioned another factor that is causing problems. Many investors seem to be betting that XRP’s price will continue going down, a strategy called short selling. This means investors borrow XRP, sell it at the current price, and hope to buy it back later at a lower price to make a profit. He observed that funding rates for XRP across crypto exchanges have turned negative. When funding rates turn negative, it usually shows an imbalance – more traders are expecting XRP’s price to fall.
Interestingly, even though some cryptocurrencies are seeing money flow into spot ETFs (investment funds people can directly buy and sell like stocks), XRP is not performing as well as other popular tokens. It seems the recent price action for XRP is more due to selling by traders rather than any new, positive developments.
All eyes are now on XRP’s price to see if it can find a solid base or if bigger drops are ahead, especially in the $1 range.
The original story appeared on CryptoPotato.