Is XRP price going to crash again?

XRP (XRP) has dropped by 22.25% over a month after hitting $2.90, its highest level since January 2018, and was trading for as low as $2.26 on Jan. 10.

Profit-taking due to XRP’s overbought levels, strong US economic data, and the Federal Reserve’s hawkish pivot have been the primary reasons for the price decline.

Let’s examine whether XRP’s price could drop further in the coming days.

XRP symmetrical triangle raises 40% drop potential

XRP price is painting a symmetrical triangle on the daily candle chart, marked by converging trendlines connecting higher lows and lower highs. This pattern typically hints at indecision in the market, with the possibility of a significant price breakout in either direction.

As of Jan. 10, XRP is trading near the triangle’s upper trendline, which, in recent history, has preceded declines toward the lower trendline. In other words, a decline toward $2.05, or the 50-day exponential moving average (50-day EMA; the red wave).

A decisive break below the lower trendline could send XRP price further lower toward $1.36, down about 40% from the current price levels, by February.

This downside target is measured after subtracting the triangle’s maximum height from the potential breakdown point at the triangle’s apex near $2.18.

Conversely, a clear break above the triangle’s upper trendline could send XRP toward $3.46, measured by adding the triangle’s maximum height to the potential breakout point at around $2.18.

However, XRP’s market currently favors the bears, primarily due to signs that its richest investors are selling their holdings during the ongoing price consolidation.

As of Jan. 10, XRP’s supply held by addresses with at least 1 million tokens had declined to a new record low of 90.50 billion, according to data resource Messari. In comparison, these entities collectively held 100 billion XRP last year.

Can XRP price go as low as $1.50?

On the weekly timeframe chart, XRP has been consolidating inside the $1.98-3.03 price range, aligning with its 1.0 and 1.618 Fibonacci retracement lines.

As of Jan. 10, XRP/USD bounced a week after testing the $1.98 level as support. However, its upside momentum has slowed, with the price declining by around 4% in the current weekly session.

Notably, the cryptocurrency’s weekly relative strength index (RSI) remains above the overbought threshold of 70, underscoring the risk of a deeper correction in the near term.

If the bears prevail, XRP could retest the $1.98 support level in the coming days or weeks.

A decisive break below this level would further increase the likelihood of a drop toward the 20-week EMA (the purple wave), currently near $1.50, a level that served as a correction target during similar overbought conditions in the past. It is right below the 0.786 Fib retracement target at around $1.62.

Related: XRP market cap of $500B ‘possible’ within 6 weeks, says veteran trader

Conversely, if XRP holds above $1.98 support, the likelihood of a rebound toward $3 is high. This upside target aligns with cryptocurrency and forex trader Valeriya’s bullish outlook for XRP price.

“The XRP price is in the key decision-making zone. The reaction to the level of $2.15–$2.20 will be an indicator of the intentions of major players,” he said, adding:

“If the support zone resists, an aggressive growth is expected with the nearest target of $2.91, where the liquidity of sellers is concentrated. If the level is broken, the market may go for liquidity below $2.00.”

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.