XRP Price Plunges to $2.34: Is a 40% Correction Looming?

XRP, one of the most talked-about cryptocurrencies, has seen a significant decline of 22.25% over the last month. After reaching its highest point since January 2018 at $2.90, XRP now trades around $2.34 as of January 10, with some analysts predicting the potential for a 40% drop. Here’s a breakdown of the key factors contributing to XRP downward spiral and what the future might hold for the token.
Key Factors Behind XRP Price Decline
Several factors are playing a role in XRP recent price drop:
- Profit-Taking: After XRP rally in late 2024, many investors cashed in on their gains, resulting in selling pressure.
- Strong U.S. Economic Data: Positive data from the U.S. economy has caused some investors to move away from riskier assets like cryptocurrencies.
- Federal Reserve’s Hawkish Stance: With the Federal Reserve signaling tighter monetary policies, XRP, like many altcoins, has seen a slowdown in bullish momentum.
Symmetrical Triangle Forms: Could XRP Drop 40%?
XRP’s current chart shows a symmetrical triangle pattern, a technical formation often seen as a precursor to a strong price move in either direction. Here’s what’s at play:
- Upper Trendline: As of January 10, XRP is near the upper trendline of the symmetrical triangle. Historically, this has preceded declines toward the lower trendline, which could bring the price down to $2.05, near the 50-day EMA.
- Bearish Breakout: If XRP breaks below the lower trendline, the downside potential could be significant. A drop toward $1.36 would represent a 40% decline from current levels, based on the chart pattern’s maximum height.
- Bullish Breakout: On the flip side, if XRP breaks above the upper trendline, it could see a bullish breakout, with potential resistance levels at $3.46, signaling a surge in buying momentum.
Selling Pressure from Large Holders
XRP is also facing additional bearish pressure due to the actions of its largest holders. According to Messari, addresses holding at least 1 million XRP tokens have reduced their holdings to a new low of 90.5 billion XRP, compared to 100 billion XRP last year. This shift indicates that whale investors may be taking profits or anticipating further downside.
Can XRP Drop as Low as $1.50?
On the weekly chart, XRP has been consolidating within a price range of $1.98 – $3.03, hovering near significant Fibonacci retracement levels. As of January 10, XRP bounced off the $1.98 support level, but its upside momentum seems to have stalled.
- XRP’s weekly RSI is still above 70, indicating that it remains in overbought territory. A correction from these levels could push XRP back down to $1.98 or lower in the coming days.
- Key Support Levels: A break below $1.98 would increase the likelihood of further downside, with a potential drop toward the 20-week EMA (currently near $1.50). If XRP falls to $1.50, this would also align with the 0.786 Fib retracement level at $1.62, which has historically provided solid support during corrections.
Key Levels to Watch:
- Support Levels: $1.98, $1.50
- Resistance Levels: $2.90, $3.46
XRP is currently at a critical juncture, with its price poised to either break downward toward $1.50 or rebound toward $3. Market conditions, whale actions, and upcoming technical indicators will likely determine which direction XRP takes in the near future.