As a seasoned analyst with over two decades of experience in the financial markets, I have seen my fair share of market cycles and trends. The recent surge in XRP‘s price has been nothing short of impressive, but my cautious nature compels me to sound a warning bell.
The value of XRP (XRP) has surged by approximately 300% within the past two months and was recently exchanged for $2.10 on December 27th. Nevertheless, indicators are flashing caution signals that could potentially cause a drop of around 25% in the short term for XRP/USD pair.
XRP nears descending triangle breakdown
The current drop in XRP’s value occurs as it follows a descending triangle formation on the charts, which is usually a bearish indicator suggesting potential additional decreases ahead.
The shape of this pattern is determined by a progression of successive lower highs that establish the downward sloping line for the triangle’s trend, and at the same time, the level of $2.10 serves as a horizontal support.
If the price falls significantly below the $2.10 support, it might trigger a larger decline. By applying the technical analysis rule, we can estimate the possible minimum downward movement as the difference between the breakdown point and the height of the ongoing price pattern.
As a cryptocurrency investor, I’d be sharing that based on certain forecasts, the value of XRP could potentially dip to around $1.64 by January 2025. This represents a possible 25% decrease from its current market prices. Keep in mind, this is just an estimation and actual results may vary. Always do your own research when making investment decisions.
XRP whales sell the rip
As a crypto investor, I’m closely watching on-chain data that suggests a bearish trend might persist. Specifically, I’ve noticed the behavior of large wallets, or “whales,” which seems to indicate a distributive sentiment – meaning they are spreading their holdings rather than accumulating more, which could be a sign of uncertainty or selling pressure in the market.
Significantly, the number of XRP held by its wealthiest investors (those possessing more than a million tokens) has decreased by approximately 180 million since the start of December.
Currently, the amount of XRP held by entities with a balance of 100,000 units has diminished by approximately 170 million. This decrease in supply coincides with XRP’s more than 26% drop from its peak price of $2.90.
On a broad scale, an excessive number of whales (large investors) selling their tokens could lead to a surge in the token supply available for trade. This excess supply might push down the market price because there’s more product available than what buyers are interested in purchasing. When this decrease in price occurs alongside heavy selling activity, it implies that the demand for these tokens has been overpowered by the supply.
XRP supply on Binance is rising
Furthermore, Reserves of XRP on Binance, the leading crypto exchange in terms of trading volume, have consistently grown since mid-December. This trend is often interpreted as a bearish indicator because it frequently foreshadows price adjustments following such accumulation.
An increase in exchange reserves suggests that investors are cashing out at peak prices, which strengthens the idea of profit-taking and continues to drive a downtrend for XRP.
If this ongoing trend persists, there’s a potential for a 25% decrease in the price of XRP, given the increasing supply on exchanges and major investors continuing to offload their XRPs.
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2024-12-27 14:22