The XRP price shows signs of a potential crash as technical patterns indicate increased bearish momentum. Despite upcoming catalysts, including regulatory developments and market expansion, analysts suggest a significant downturn may be imminent.
Market data highlights a concerning pattern forming on XRP’s daily chart. The cryptocurrency has developed a head and shoulders pattern, a classic bearish signal that suggests a possible decline in value.
The neckline of this pattern is positioned at $2, with the highest peak—the head—reaching a year-to-date high of $3.40. The shoulders have formed at $2.88, reinforcing the risk of further losses.
Adding to the bearish outlook, XRP has fallen below the 50-day Exponential Moving Average (EMA), signaling that sellers are gaining control. If the price drops below the critical $2 support level, it could confirm a downward breakout.
Analysts predict a potential decline toward the $1.1395 level, which aligns with the 78.2% Fibonacci Retracement. This projection suggests that XRP may experience a nearly 50% price decrease if selling pressure intensifies.
A recovery above $2.74, aligning with the 23.6% Fibonacci level, would challenge this bearish view.
Source: Tradingview
Wyckoff Theory Suggests Market Distribution Phase
Market analysts also use Wyckoff’s theory to explain today’s XRP price wave. This 95-Year-Old Theory Outlines Four Phases in the Asset Price Cycle, From Accumulation to Markup, Distribution, And Markdown.
XRP remained stagnant for over three years before ramping up due to favorable market sentiment driven by political events and regulatory factors.
After rising to $3.41, Ripple (XRP) entered a consolidation stage, oscillating around a trend line while fluctuating wildly. This phase often precedes a markdown where panic selling triggers a steep drop.
Even though, according to analysts, this theory is consistent with the current price action, and failure to hold the price above the identified support levels can trigger a selloff.
Despite positive developments, such as the potential dismissal of regulatory charges and speculation surrounding a spot XRP exchange-traded fund (ETF), XRP continues to mirror a downward trend.
The market’s reaction to regulatory news like Uniswap suggests that any favorable decision may not counteract existing bearish signals.
Economic Uncertainty and Market Reactions Weigh on XRP
Concerns over economic policies are also impacting XRP’s outlook. Analysts point to fears surrounding President Trump’s planned 25% tariffs on Canadian and Mexican goods as a factor fueling financial market uncertainty.
While the tariffs were initially postponed, they are set to resume this Saturday unless a new trade agreement is reached. This new level of unpredictability around trade policies puts even more pressure on XRP, where the bearish outlook persists due to aversion towards risks in favor of safer investments.
This selling pressure, investor pessimism, continued regulation, and technical problems raise the risk of a lower price decline.
The continuously expanding XRP Ledger ecosystem is highly attractive to developers; however, the technically derived patterns point towards bearish short-term forces that affect price.
Also Read: New Shocking Twist Uncovered in The Ripple-SEC Lawsuit, Could Impact Outcome
