In recent days, the cryptocurrency market has experienced significant price drops, shifting market sentiment. XRP, Ripple Labs' native token, has lost its pivotal support level at $2.50, setting the stage for a potential decline.
XRP Technical Analysis and Upcoming Levels
According to expert technical analysis, XRP appears bearish as it has broken down from an ascending triangle pattern on the four-hour timeframe. This bearish outlook was further confirmed by breaching and closing a candle below the crucial $2.50 support level. Based on recent price momentum and historical patterns, if the asset remains below this key support, it could drop by 13% to reach the $2.10 mark in the coming days. In addition to the bearish price action, XRP is trading below the 200 Exponential Moving Average (EMA) on the daily timeframe, indicating a downtrend.
Current Price Momentum
XRP is currently trading near the $2.46 level and has dropped over 3.80% in the past 24 hours. However, during the same period, its trading volume surged by 100%, indicating increased participation from traders and investors compared to previous days. The 100% jump in trading volume typically occurs when an asset either breaks out or breaks down from a pattern, as traders actively participate to capture a major move. In this case, it was likely driven by the breakdown of the ascending triangle.
$15 Million Worth of XRP Outflow
Despite this bearish outlook, investors and long-term holders appear to be accumulating the token, following the 'Buy the Dip' strategy, as reported by the on-chain analytics firm Coinglass. Data from spot inflow/outflow reveals a significant outflow of $15 million worth of XRP tokens from exchanges in the past 24 hours. Such an outflow from exchanges indicates potential accumulation, which can create buying pressure and potentially slow down the price decline.
Amidst the cryptocurrency market's downturn, XRP has faced downward pressures. Nevertheless, interest from long-term investors may partially mitigate this effect.
