XRP has reached a critical support level amid a general decline in the cryptocurrency market. This situation sparks interest in further developments.
XRP Technical Analysis
XRP faces the risk of additional losses in the short term. The daily chart shows that the price has fallen below the 50-day and 100-day moving averages, a bearish signal indicating that sellers are in control. Additionally, XRP has formed a head and shoulders pattern, which consists of two shoulders, a neckline, and a head. The price has dropped to the slanted neckline, aligning with the strong pivot reversal of the Murrey Math Lines. As a result, a strong bearish breakdown is likely, with the next reference level at $1.79. A move below this level could open the door to further declines, with the next support at $1.6130, corresponding to the 61.8% Fibonacci retracement level.
Wyckoff Theory: Next Steps for XRP
According to the Wyckoff Theory, there is a risk of further downside for XRP. Recent data indicates that the coin has moved into the distribution phase. For most of last year, it was in the accumulation phase, characterized by sideways price action. It then entered the markup phase in November, surging by over 400%. Now, XRP is in the distribution phase. A break below the neckline of the head and shoulders pattern would confirm its transition to the markdown phase, marked by increased supply, reduced demand, and panic selling among investors.
Potential Bullish Catalysts for XRP
Despite bearish projections, there are still opportunities for XRP to rebound. The decision by the Securities and Exchange Commission (SEC) to end lawsuits with Coinbase and Robinhood may set a precedent for similar actions concerning Ripple. Additionally, the odds of the SEC approving an XRP-based ETF have risen to 80%. If approved, JPMorgan estimates that it could attract over $8 billion in investments this year.
XRP is at a critical market position, facing several technical and methodological challenges. However, several factors could contribute to its recovery in the near future, including potential regulatory decisions that may play a significant role in XRP's future trajectory.
