The cryptocurrency market continues to experience volatility, and XRP is no exception. This article examines the current trends and potential risks related to XRP.
Current Trends in XRP Market
XRP’s price reached approximately $2.50 on June 4, recovering over 40% from lows seen on April 7. However, this price remains 37% below its January high of $3.40. An on-chain measure called Net Unrealized Profit/Loss (NUPL) indicates that XRP may be near a short-term peak. This metric entered a zone historically linked to price reversals.
Risks and Potential Price Declines
Technically, XRP trades within a falling wedge pattern. The price recently pulled back after testing the pattern’s upper resistance line. Previous tests of this resistance led to price drops. If this pattern repeats, XRP might experience a potential 22% decline toward $1.78, aligning with the wedge’s lower trendline and a key moving average. A larger drop toward $1.45, representing a 38% fall from current prices, also remains possible if downward pressure increases.
Fundamental Factors and Expectations
From a fundamental standpoint, XRP has seen a decline in liquidity. Exchange-traded products holding XRP recorded $28.20 million in outflows during the week, totaling $56.60 million monthly. This contrasts with other assets like ETH and Solana, which saw net inflows. Moreover, significant on-chain movement was observed: 330 million XRP were released while 670 million XRP were locked in escrow, reducing near-term circulating supply.
The analysis of current metrics, including NUPL and institutional investor activity, indicates potential risks for XRP in the near future. The ability of XRP to overcome its current technical resistance will likely determine whether it avoids projected declines.
