XRP Faces Risk of a 41% Price Plunge if Key Support Breaks

XRP’s daily chart reveals a descending triangle pattern, typically a bearish reversal indicator following an uptrend. The flat support near $2.00 is under pressure, and a decisive breakdown could trigger a fall to the pattern’s target near $1.18, representing a 41% drop from current levels. This aligns with previous analyses warning of similar downside risks if support fails.

Declining Open Interest and Negative Funding Rates Reinforce Bearish Outlook

Data from CoinGlass shows XRP’s open interest has dropped 36% since mid-May, indicating waning investor enthusiasm and capital inflows. Additionally, funding rates have turned negative, reflecting growing bets on price declines. Historically, such conditions have preceded significant price corrections in XRP and other cryptocurrencies.

Did you know?
XRP’s descending triangle pattern is a classic technical formation that has historically preceded significant price moves, making its current development closely watched by traders worldwide.

Critical Liquidity Zones at $1.75 and $1.60 Could Influence Price Floors

Binance’s XRP/USDT liquidation heatmap highlights concentrated liquidity clusters around $1.75 and $1.60. Breaching the $1.75 support could trigger liquidation cascades, pushing XRP toward the next major liquidity zone near $1.60. These levels serve as potential short-term floors but also indicate where selling pressure could intensify.

Resistance Levels and Bullish Scenarios Remain Possible

A breakout above the descending triangle’s resistance near $2.22, where the 50-day and 100-day moving averages converge, would invalidate the bearish setup. Such a move could propel XRP toward $3.00, signaling renewed bullish momentum. However, current price action struggles to sustain levels above $2.00, underscoring the dominance of bears.

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Broader Market Sentiment and Regulatory Factors Impact XRP’s Trajectory

XRP’s price is also influenced by broader crypto market trends and ongoing regulatory developments, including the SEC’s legal proceedings involving Ripple. Positive regulatory outcomes could boost investor confidence, while adverse news may exacerbate selling pressure. Market correlation with Bitcoin’s performance further complicates XRP’s near-term outlook.

Strategic Outlook

XRP stands at a critical juncture where technical and market forces could drive a sharp decline or a strong rebound. Investors should monitor key support and resistance levels, open interest trends, and funding rates closely.

Regulatory developments and Bitcoin’s price action will also have an effect on XRP’s trajectory. Caution and strategic planning are essential as XRP navigates this volatile phase.