Key Points:
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The price of XRP has experienced a decline of almost 20% over the past 45 days, now consolidating within a descending triangle pattern near its $2.70 support level.
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Data from on-chain analysis and futures markets reveals a reset in leverage and initial indications of accumulation, potentially mitigating liquidation risks.
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The convergence of a fair value gap, Fibonacci retracement levels, and observed fractal patterns suggests a possible rebound of 60% to 85% during the fourth quarter.
The price of XRP (XRP) has seen a reduction of almost 20% recently, as its price has been pushed closer to a critical support level. Looking at the daily chart, XRP is currently consolidating inside a descending triangle formation, which could suggest another potential drop below the $2.70 support.
Information extracted from XRP futures trading points to a cooling of the market sentiment. Open interest has decreased from $11 billion down to $7.5 billion in the same period, demonstrating a reduction in speculative trading activity.
However, a noteworthy positive aspect is that XRP’s estimated leverage ratio on the Binance exchange has returned to its average level for the year. This ratio, comparing open interest to exchange reserves, suggests that traders are no longer utilizing excessively high leverage. This could help stabilize the price during downward trends and reduce risks of significant liquidations.
On-chain analytics further indicates initial signs of a potential trend change. Net taker buy volume has become more neutral, supported by an upward move in the aggregated spot cumulative volume delta (CVD), which assesses whether buyers or sellers are the dominant force. This shift indicates that XRP holders might already be in an accumulation phase.
Insights from futures trading add to this picture. Aggregated futures CVD has been consistently decreasing, while funding rates have returned to their normal quarterly levels, suggesting that overleveraged positions have been resolved.
Related: Betting on XRP’s 2017-style gains could be extremely risky in 2025
XRP Price Might Be Nearing a Bottom
From a technical perspective, XRP continues to trade within a descending triangle, repeatedly testing its support near $2.70. A fair value gap found on daily and weekly charts between $2.35 and $2.65 has emerged as a crucial area to monitor. A break below $2.70 could push XRP into this zone, where a price reaction is anticipated.
The importance of this gap is enhanced by Fibonacci retracement levels, with the 0.5 to 0.618 range aligning closely with the $2.35 to $2.65 zone. Historically, this alignment has increased the chances of price stabilization and a subsequent rebound.
Reinforcing this outlook, Cointelegraph noted that XRP’s market structure bears a resemblance to a fractal pattern seen in Q1, which then led to a significant breakout. If this pattern repeats, XRP may experience gains ranging from 60% to 85% in the fourth quarter.
Crypto analyst Javon Marks highlights a similar optimistic outlook, stating that “at the current market conditions, XRP’s target at $4.80 remains, as its price is holding above the significant $2.47 level.”
Marks added that “as long as this level remains, the price could simply be preparing for another +66% surge.”
Related: Rare Binance Bitcoin bottom signal fires: Will bulls or bears benefit?
This article should not be considered as financial advice. Trading and investments inherently carry risks. Readers should conduct their own independent research before making any investment decisions.