The Ripple XRP price is in danger of falling more than 25% in the coming weeks due to several months of bearish setup and fears of XRP oversupply.

XRP descending triangle
XRP has consolidated in a declining triangular pattern since reaching its second highest level so far – around $ 1.98 – in April 2021.

In doing so, the XRP / USD pair left a series of lower peaks on the upper trend line, finding strong support around $ 0.55 as shown in the chart below.

XRP / USD weekly candlestick chart. Source: Trading View
In the week ending March 13, the XRP price once again tested the upper triangle trend line as resistance, raising concerns that the coin could undergo a new withdrawal to the trend line support for the pattern near $ 0.55, which is a fall of 25% – 30%.

The Bearish forecast is also based on other bearish catalysts around the triangle resistance.

For example, on March 12, the XRP formed a bearish hammer, a simple candlestick pattern with a small body and a long bullish wick, indicating lower buying pressure near the coin’s weekly high of around $ 0.85.

The daily chart of the XRP / USD shows a bearish hammer. Source: Trading View
In addition, the price reversed lower after testing the confluence of resistors defined by 20-week EMA, or 20-week EMA (green wave), and 50-week EMA (red wave), as shown in the attached file. the image below.

XRP / USD weekly candlestick chart with moving average resistance. Source: Trading View
Oversupply of RD&D
Several negative signals for XRP came after Ripple Labs blocked 800 million XRP in landfill as part of a programmed withdrawal plan.

The blockchain payment company transferred around 100 million XRP, worth almost 40 million dollars, to its wallet exchange on March 3. In the meantime, it has kept the remaining 700 million XRP (worth around 550 million dollars) in custody, raising expectations that at least 200 million XRP will flood the market to generate funds for Ripple’s operating expenses as well as distribute XRP to clients. Ripple around the world.

Concerns about sales stemmed from XRP’s previous price reaction to the unexpected increase in supply. For example, XRP / USD plunged more than 50% to nearly $ 0.60 in four months after net supply increased from $ 40.46 billion to over $ 47 billion in just two days.

XRP rolling supply. Source: messari
However, Ripple’s withdrawals of XRP 800 million have not yet been reflected in net sales.

The risk of income stabilization increases
Another catalyst that suggests that the price of XRP may fall by 25-30% to reach the target of the declining triangle is the Santiment Index, which tracks social media trends and their impact on market trends.

XRP price versus XRPN network trend in dollars. Source: emotion
The price of XRP has risen by more than 15% since the beginning of the week on March 12, Santiment notes, along with an increase in social media searches for the hashtag #XRPNetwork, suggesting that this could lead to potential sales. Excerpt:

“Historically, our social trends show that profit is guaranteed when the audience makes #XRPNetwork the main theme.”

Source: CoinTelegraph

LEAVE A REPLY