Ripple XRP price is at risk of dropping more than 25% in the coming weeks due to the multi-month bearish setup and XRP oversupply concerns.

XRP descending triangle
XRP has been consolidating in a bearish triangle pattern since it reached its second highest level so far – around $1.98 – in April 2021.

However, the XRP/USD pair left a series of lower tops on the upper trend line while finding strong support near $0.55 as shown in the chart below.

XRP/USD weekly candlestick price chart. Source: Trading View
In the week ending March 13th, XRP price once again tested the upper triangle trendline as resistance, sparking concerns that the coin could undergo a new flow towards the pattern’s support trendline around $0.55, which is a drop between 25% and 30%. .

The negative outlook is also taking cues from other bearish catalysts that appeared around the triangle resistance.

For example, XRP formed a bearish hammer on March 12th, a simple candlestick pattern with a small body and a long inverted week, which indicates a decrease in buying pressure near the weekly top of the coin at around $0.85.

XRP/USD daily bearish hammer. Source: Trading View
In addition, the price was lower after testing the confluence of opponents defined by the 20-week EMA, or the 20-week EMA (green wave), and the 50-week EMA (red wave), as is shown in the diagram. Picture attached below.

XRP/USD weekly price chart for candles with moving average resistance. Source: Trading View
Increase RD & D
Several downsides to XRP emerged after Ripple Labs blocked 800 million XRP from deposits as part of a programmed withdrawal scheme.

The blockchain payments company transferred about 100 million XRP, worth approximately $40 million, to its wallet exchange on March 3. Meanwhile, it has kept the remaining 700 million XRP (worth about $550 million) in a closed account, raising expectations that at least 200 million XRP will be released into the market to raise funds for Ripple’s operating expenses, as well as distribute XRP to clients. Ripple around the world.

Meanwhile, another 700 million XRP (worth around $550 million) was kept in a closed account, raising expectations that at least 200 million XRP will go to the market to raise funds for Ripple’s operating expenses as well as for distribution. XRP is among Ripple’s global clients.

The fear of selling stemmed from the previous XRP price reaction to unexpected bids. For example, XRP/USD plunged more than 50% to close to $0.60 four months after increasing net circulating supply from $40.46 billion to over $47 billion in just two days.

XRP rolling supply. Source: messari
However, Ripple’s withdrawal of 800 million XRP was not reflected in its net sales.

Increased profit risk
Another catalyst that indicates that the price of XRP could drop by 25-30% to reach the target of the descending triangle is the Santiment Index, which tracks social media trends and their impact on market trends.

XRP Price vs. XRPNetwork Trend in Dollars. Source: feeling
The price of XRP is up more than 15% from the previous week on March 12, Santiment notes, along with a significant increase in social media searches for the hashtag #XRPNetwork, indicating a possible sell-off in the future. Excerpts:

“Historically, our social trends show that profit is justified when the public makes #XRPNetwork the main topic.”

Source: CoinTelegraph

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