Warning Bell for XRP: Brace for More Fall, Technical Signals Insist Correction Won't Stop Soon
XRP's slide not stopping; Here's the fresh minimum prediction to monitor
Look out, XRP investors! A trading guru is shouting warnings that the digital token might continue plummeting below the $2 mark, with technical indicators suggesting the ongoing correction could rumble on.
As of now, XRP is trading at $2.16, shedding 1.56% for the past 24 hours and around 8% for the last week.
XRP's Bearish Trend: Not Over Yet
In a May 30 post on TradingView, analyst Master Ananda pointed out XRP is exhibiting renewed signs of weakness. This deepening bearish trend hints the correction phase may not have run its course yet.
The selling spree picked up speed on May 12, with XRP seeing increased downward pressure ever since, breaking its earlier green channel from early April, effectively squashing the short-term bullish bounce triggered when XRP breached the $1 barrier.
Another significant technical shift was the breakout from the ascending channel, characterized by a switch from higher highs to lower highs, three consecutive red daily candles, and a broader market slump.
One silver lining, according to Ananda, is that bearish volume remains "exceptionally low," which may suggest the current sell-off lacks solid conviction. Despite this, he urged traders to prepare for more downsides without a robust support level.
The chart offered by Ananda highlighted the upcoming potential support zone, or "higher low," around $1.60 to $1.85. This region served as a breakout area in early April and could potentially act as a price floor.
Additionally, the 0.236 Fibonacci retracement level at $2.0350 is worth noting. In case XRP breaks below this level, it could pave the way to the $1.80 zone or even $1.61, depending on broader market sentiments.
Despite the negative short-term outlook, Ananda remains optimistic about XRP's long-term prospects. In this scenario, long-term holders continue to target resistance levels at $2.70 and even $3.40 in an eventual bullish reversal.
"Though a rebound can occur any second, the indications are bearish, and we've witnessed three consecutive days of red action, plus over two weeks of falling prices. We remain optimistic long-term, but short-term, anything can happen," the analyst stated.
XRP's Price Fundamentals
XRP's recent declines are largely attributable to broader market sentiment. If the downward trend continues, the bears could potentially push the price below $2.
This sell-off comes despite the U.S. Core PCE Price Index (excluding food and energy) dipping to an annual rate of 2.5% in April, its lowest level since March 2021.
However, the Federal Reserve has persisted in its hawkish stance, hinting that trade tariffs might ramp up the risk of recession.
The correction has also sparked significant activity in the liquidation markets. When XRP dropped to $2.17, leveraged traders faced $30 million in liquidations, mainly from long positions, which incurred losses totaling $29.75 million, compared to mere $384,000 in shorts.
In the meantime, investors will also keep a close eye on XRP-specific fundamentals, including the possibility of a spot XRP ETF approval and the resolution of the SEC vs. Ripple case, which appears to be heading towards a settlement.
Crypto enthusiasts should be prepared for further drops in XRP's price, as the ongoing bearish trend in XRP's technology sector suggests the correction may not reach a halt soon. Investors should also monitor XRP-specific fundamentals, such as the possibility of a spot XRP ETF approval and the resolution of the SEC versus Ripple case.
