After a period of relative stability, XRP has recently fallen below the critical $2 mark, leaving investors concerned about how low the price could potentially go. Several factors are contributing to this downturn, including whale sell-offs, broader market trends, and a shift in investor sentiment.
Recent Market Performance and Analysis
XRP's recent performance has been disappointing for many investors. It has dropped below the $2 psychological level, with an 8% pullback in the past 24 hours and a 15% loss for the week. Those who purchased XRP at the beginning of the year are now facing losses. Currently, XRP is trading around $2.11, a 15% decrease for the week, and is hovering just above a critical support level. A break below $2.10 could lead to further decline towards $2.00 or even lower.
Analysts suggest that the downward momentum may continue, potentially leading to a 12-month low of $1.55, which would represent an 18% correction from the current market price of around $1.90. One analysis of the XRPUSD pair's 8-hour chart reveals a descending triangle pattern forming since October 2, when it was $3.10. The price broke down on November 17, and after retesting the triangle's lower support around $2.20 without reclaiming it, further corrections are expected.
Factors Contributing to the Price Drop
Several factors are contributing to the current bearish sentiment surrounding XRP:
- Whale Sell-offs: Data indicates that large holders have been offloading significant amounts of XRP, with approximately 200 million XRP (nearly $400 million) sold in just two days. This has created intense selling pressure and pushed the price downwards.
- Broader Market Trends: The overall cryptocurrency market has experienced volatility and uncertainty, contributing to the decline in XRP's price. Extreme fear sentiment has caused long-term holders and whales to shift into an "anxiety" phase.
- Weak Network Activity: User traction on the XRP Ledger has decreased significantly over the past four months, which has contributed to the price weakness. A 91% drop in user interest may be attributed to the growing market uncertainty.
- ETF Impact: The launch of XRP Exchange Traded Funds (ETFs) by Canary Capital and Bitwise initially generated excitement, but failed to maintain momentum. The combined $22 million turnover on the first day was followed by aggressive profit-taking, negating the positive impact.
Potential Support Levels and Predictions
Despite the current bearish trend, there are potential support levels that could prevent further decline. Crypto analyst Ali Martinez has identified $1.91 and $1.73 as key levels to watch if the price continues to fall. If XRP breaks below $1.80, the measured target for this pattern is $0.88. Key levels to watch before this target is reached are the 100-week simple moving average (SMA) at $1.60 and the 200-week SMA at $1.05.
Potential for Rebound
Despite the current negative outlook, there are factors that could lead to a potential rebound. Upcoming XRP ETFs from Franklin Templeton, which are projected to have $150–$250 million in first-day trading volume, could significantly influence price momentum. If bulls can push XRP above $2.20 and $2.30, a move towards $2.60 could be possible.
Overall Sentiment
The overall sentiment surrounding XRP is currently bearish, with concerns about further price declines. However, the market is closely watching key technical levels and the potential impact of upcoming ETFs. Whether XRP can regain its footing and reverse the current downtrend remains to be seen.
