What’s Next for XRP After Its Plummet Below $2?

Key Takeaways:

XRP’s megaphone pattern on the weekly chart targets $0.88.
Increased selling pressure has prompted several investors to offload their XRP assets at a loss.

XRP extended its downward trend on Friday, falling 3% in the last 24 hours to trade at $1.93. The failure to sustain a position above $2 now raises questions about the altcoin’s recovery potential, with traders pondering how far it might drop.

XRP/USD one-hour chart XRP/USD one-hour chart. Source: Cointelegraph/ TradingView

Classic XRP Pattern Anticipates $0.88

The XRP/USD pair has developed a megaphone pattern on the weekly chart, indicating a more profound correction might be imminent for the altcoin. This megaphone pattern, sometimes recognized as a broadening wedge, emerges when the price establishes a succession of higher highs and lower lows. According to technical analysis, a breakout beneath this pattern’s lower boundary could provoke a steep decline.

In XRP’s situation, confirmation of this pattern will arise once the price surpasses the lower trend line near $1.80. The anticipated target for this setup is $0.88, indicating a 54% increase from the current valuation.

Key levels to observe prior to reaching this target include the 100-week simple moving average (SMA) at $1.60 and the 200-week SMA at $1.05.

The weekly Relative Strength Index (RSI) decreased to 39 on Friday, dropping from July’s extremely overbought zone of 91, signifying gradually intensifying downward pressure over this timeframe.

In addition, XRP’s Net Unrealized Profit/Loss (NUPL) has fluctuated from ecstasy to denial, with rising anxiety now surfacing.

With over 41.5% of XRP holders currently facing losses, there’s an expectation of heightened selling pressure as investors tally their setbacks. Analogous occurrences in 2018 and 2021 led to significant corrections, suggesting similar downturns might happen over the next few weeks.

XRP Realized Losses Reach Seven-Month Peaks

XRP dipped to an intraday low of $1.81, a level not observed since April, as reported by Cointelegraph Markets Pro and TradingView. The increasing selling momentum has driven numerous investors to sell at a loss, echoing notable past market downturns.

Realized losses on XRP have reached heights not recorded since April, as per Glassnode, a blockchain data platform. “The 30D-EMA of daily realized losses has surged to approximately $75M per day,” Glassnode remarked in a recent post on X.

XRP realised loss XRP realized loss. Source: Glassnode

Glassnode’s insights were shared shortly before XRP slid under $2, marking a 50% drop from its multi-year high of $3.66 noted in mid-July. The lack of on-chain demand and ongoing profit-taking by whales could heighten XRP’s sell-off prospects.

This article does not offer investment guidance. Each investment and trading action carries risk, and readers should perform their own research before making any decisions.