Key Points:
Since its significant rise in November 2024, XRP ( XRP) has repeatedly surpassed the $3 mark. However, these breakouts have consistently proven to be temporary, leading to subsequent price declines.
On Saturday, the price of XRP again dipped below the $3 support level, coinciding with its 200-period exponential moving average (EMA) on the 4-hour chart (represented by the green line).
Is a further decrease in XRP’s value likely in the coming days? Let’s analyze the situation.
Potential 15% Correction Based on XRP Chart Pattern
XRP’s price action is exhibiting a pattern suggestive of a potential 15% price correction, potentially pushing the value down to around $2.60.
Back in September, the digital asset’s value formed a rounded top pattern. Following this, it entered a phase of consolidation within a symmetrical triangle before experiencing a sharp decline. This downturn led to XRP prices falling towards the $2.70 region.
A similar pattern appears to be unfolding in October.
Looking at the four-hour timeframe, XRP has again formed a rounded top and is currently consolidating within what appears to be a bearish flag pattern. This type of structure often indicates a subsequent move downwards, potentially equivalent to the maximum distance between the flag’s upper and lower trendlines.
The four-hour relative strength index (RSI) reinforces this bearish outlook. The RSI has been declining from overbought conditions (above 70) and still has room to fall before reaching the oversold threshold of 30.
Related: XRP price reclaims $3, opening the way for 40% gains in October
XRP could initially test the flag support level at $2.93. A confirmed break below this level could signal a breakdown, potentially paving the way for a move towards $2.60, representing a decline of approximately 15% from current levels.
This potential downside target aligns with XRP’s 200-day EMA (indicated by the blue line on the chart below).
However, a bounce from the 20-day EMA ($2.93) or the 50-day EMA ($2.52) could negate the bearish outlook, potentially leading to a rebound back towards the $3 level.
Liquidation Data Suggests Potential for Further XRP Sell-Off
According to data from CoinGlass, the $3 level for XRP is situated between two significant liquidity areas.
To the upside, there are substantial clusters of long liquidation levels positioned between $3.18 and $3.40.
For example, at $3.18, the aggregate short leverage amounts to approximately $33.81 million. This suggests that the price could potentially move upward to trigger stop-loss orders if buyers regain control.
Conversely, the heatmap indicates even larger liquidation pools concentrated between $2.89 and $2.73, totaling over $500 million.
XRP’s decisive break below $3 could initiate a cascade of long liquidations, driving the price down towards the $2.89–$2.73 range. Maintaining a price above $3, on the other hand, could create an opportunity for a stop-run towards $3.20–$3.40.
This analysis is for informational purposes only and does not constitute financial advice. Trading cryptocurrencies involves significant risk, and readers should conduct their own thorough research before making any investment decisions.