- XRP was at risk of a breakdown after trading within a consolidation phase, with analysts predicting a possible drop to $0.4319.
Supporting evidence from various market indicators strengthens the forecast of an impending fall.
As an experienced crypto investor with battle-scars from multiple market cycles, I’ve learned to read between the lines when it comes to market indicators and analyst predictions. After carefully examining the current state of XRP, I must say that the consolidation phase seems to be leading towards a potential breakdown rather than a breakout.
Over the course of each day, Ripple (XRP) seems to be falling behind its peers, and this downward trend may persist. So far, it’s seen a dip of about 1.71%, and there’s speculation that it could drop even more.
XRP consolidation could lead to a breakdown
For approximately a year now, the price action of XRP has been confined to a specific daily price band, as observed in the analysis by AMBCrypto’s charts, with this trend starting in August.
In simpler terms, consolidation stages are times when the price tends to move up and down within a certain range, usually bounded by a horizontal rectangle. This pattern can signal a potential major drop or surge in price.
Currently, it appears that XRP has just bounced back from its resistance level and could be headed towards the lower boundary of its channel. This area might see increased buying interest, potentially causing the price to rise further, continuing XRP’s trend of price fluctuations.
Instead, it’s worth noting that according to AMBCrypto, the selling activity seems to be increasing significantly. This could potentially mean that the floor or support level might not be strong enough, leading to a possible drop in the asset’s value.
Increased supply places sell pressure
According to AMBCrypto’s analysis using data from Cryptoquant, there has been a significant rise in the proportion of XRP held on exchanges during the past 24 hours, which could possibly lead to a significant decline in XRP’s price.
This rise could indicate that more of this token is being traded on exchanges, leading to an increased supply and thus causing a drop in its price because of the potential surge of sellers.
A notable increase in the availability of XRP, frequently triggered by whales moving large amounts of XRP to exchanges for selling purposes, has become noticeable.
In the past few hours, Lookonchain noted a transaction involving a large investor transferring approximately 95 million XRP, which is worth around $49 million, according to current values. Furthermore, additional similar transactions have also been recorded.
Additionally, as reported by Cryptoquant, the inflow of XRP into exchanges has shown a consistent upward trend from the start of this month, leading to an increase in the overall XRP supply that’s held on these platforms.
Retail traders’ activity adds to bearish move for XRP
As a researcher, I’ve delved into the trends of Open Interest (OI) from Coinglass, focusing on outstanding transactions. My findings indicate a substantial decrease of approximately 7.02%, bringing the total to around $563.97 million. This decline suggests an uptick in activity among retail traders, potentially signaling a downturn for XRP‘s price.
This bearish outlook is further supported by the Parabolic SAR (Stop and Reverse) indicator.
The Parabolic Stop and Reverse (SAR) tool on charts helps recognize possible price changes in direction and momentum. It does this by placing dots above or below the price bars, and a movement of these dots suggests a transition in the market trend.
Read Ripple’s [XRP] Price Prediction 2024-25
In simple terms, the Parabolic SAR indicator for XRP is currently positioned above the price bars, indicating a possible drop in its value during the forthcoming trading periods.
If the current downtrend persists, there’s a possibility that the token’s value might fall to key support points such as $0.4319. However, should selling pressure increase significantly, the token could slide further down to $0.3823.
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2024-09-08 10:16