Key Takeaways:
XRP (XRP) continued its downward trend on Friday, falling 3% to $1.93 within the last 24 hours. The inability to now hold above $2 calls into query the altcoin's recovery possibilities, and traders are wondering how far further it could possibly fall.
XRP/USD one-hour chart. Source: Cointelegraph/TradingView
The classic XRP pattern targets $0.88
The XRP/USD pair has formed a megaphone pattern on the weekly timeframe, suggesting that the altcoin is headed for a deeper correction.
A megaphone pattern, also often called a widening wedge, occurs when price creates a series of upper highs and lower lows. As a technical rule, a breakout below the lower boundary of the pattern can trigger a pointy decline.
In the case of XRP, the pattern might be confirmed once the value breaks above the lower trendline around $1.80.
The measured goal for this pattern is $0.88, or a 54% increase from current levels.
The key levels to observe before reaching this goal are the 100-week SMA (Simple Moving Average) at $1.60 and the 200-week SMA at $1.05.
The weekly RSI fell to 39 on Friday, below the extremely overbought level of 91 in December 2024, indicating steadily increasing bearish momentum over this era.
Meanwhile, XRP’s Net Unrealized Gain/Loss (NUPL) has gone from euphoria to denial, and now fear is spreading.
With greater than 41.5% of XRP holders underwater at current prices, there’s a likelihood of increased selling pressure as investors consider their losses. Such setups in 2018 and 2021 preceded sharp corrections, raising the potential of similar pullbacks in the approaching weeks.
XRP realized losses rise to a seven-month high
According to data from Cointelegraph Markets Pro and TradingView, XRP fell to an intraday low of $1.81, a level last seen in April.
Increasing selling pressure has caused many investors to sell at a loss, paying homage to major historical market crashes.
According to blockchain data platform Glassnode, realized losses on XRP have risen to levels not seen since April.
“The 30D EMA of each day realized losses has increased to around $75 million per day,” Glassnode said in an X post on Friday.
Glassnode's statement got here minutes before XRP slipped below $2, marking a 50% decline from its multi-year high of $3.66 hit in mid-July.
As Cointelegraph reported, an absence of on-chain demand and continued profit-taking by whales could increase XRP's sell-off risks.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
