XRP’s price, down 18% in the last 30 days, is unlikely to experience a quick rebound. This development comes as the altcoin continues to face selling pressure.
In January, XRP attempted to notch a new all-time high after its explosive move from early November. However, that attempt was unsuccessful, and the token is likely to decline below $2.
Based on this analysis,
XRP Whales Keep Selling
On April 3, the number of XRP held by addresses that own over 1 billion tokens was 24.73 billion. Today, it has dropped to 24.63 billion, meaning that large holders have let go of 100 million tokens within the last 24 hours.
At the altcoin’s current price, this figure amounts to $200 million. Usually, when these key stakeholders accumulate, the price rises afterward.
Conversely, a decline in whale holdings is a negative sign. Thus, if the sell-offs continue, XRP’s price will likely drop below $2.
Open Interest Sees Sharp Decline
In addition, Open Interest (OI) has also dropped. The OI represents the sum of all open contracts in the derivatives market.
High OI indicates strong market participation. In January, XRP’s Open Interest was over $3 billion.
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At press time, that is no longer the case, with the OI declining to $1.3 billion. From a trading standpoint, the decline in OI indicates an increase in the closure of existing XRP positions.
This is typically a bearish sign. Therefore, if XRP’s price continues to slide alongside the OI, the token’s value might fail to retest $3.
XRP Price Analysis: Fall Toward $1 is Close
Regarding the technical outlook, the daily XRP/USD chart shows that the Moving Average Convergence Divergence (MACD) reading has dropped. The drop in the MACD reading indicates bearish momentum.
If sustained, XRP’s price might not be able to erase a major part of its double-digit decline. In addition, XRP’s price has formed a head and shoulders pattern on the daily chart.
A head-and-shoulders pattern is also a trend reversal formation. It is formed by a peak (the left shoulder), followed by a higher peak (the head), and then another lower peak (the right shoulder), indicating a potential shift from a bullish trend to a bearish one.
From the chart above, XRP’s price is on the verge of breaking below the neckline at $2.02. If validated, the token might decline to the 0.382 Fibonacci level at $1.60.
Should demand for the cryptocurrency continue to decline, XRP’s price might fall to $1.17.
Alternatively, if buying pressure increases and XRP does not break below the neckline of the bearish pattern, this forecast might not happen.
In that case, XRP’s price could climb to $2.78 and rise as high as $3.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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