XRP bulls should prepare themselves for a potential decrease in price in the coming weeks, as indicated by four different metrics. One of these indicators is the formation of a bear flag pattern, which is characterized by a small rectangle that slopes upward against the prevailing downtrend. If the price breaks below the lower trendline of this pattern, it could result in a significant drop in XRP’s price, potentially reaching $0.24 by May or June.
Furthermore, there has been a substantial influx of XRP into cryptocurrency exchanges, including a transfer of $24.75 million worth of XRP tokens by Ripple. This aligns with a shift in the distribution of XRP holdings, with a decrease in reserves among whales holding between 100 million and 1 billion tokens, and an increase in holdings by entities possessing over 1 billion tokens. This suggests that whales may be selling or redistributing their XRP holdings.
In addition to these factors, XRP is facing two bearish technical setups on shorter timeframes. The first is a potential “death cross,” where the 50-day exponential moving average is expected to cross below the 200-day exponential moving average. This is typically seen as a bearish signal by traditional traders. The second setup is a head-and-shoulders pattern on the daily chart, which indicates a potential trend reversal. Applying the technical rule for this pattern suggests a price target of around $0.34 by March or April.
Analysts are not optimistic about the possibility of a spot XRP exchange-traded fund (ETF) in the near future, largely due to the ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission. This, along with the absence of an XRP futures ETF in the United States, could dampen the demand for XRP compared to Bitcoin and Ethereum.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and assessment of risks before making any investment decisions.