XRP Price Faces Significant Decline Amid Market Turmoil

XRP Experiences Extended Downward Trend

Ripple’s XRP has seen a notable drop in value, falling below the crucial support level of $2 on Monday. This decline marks the token’s longest losing streak in over a month, with prices now at their lowest since April 11. The cryptocurrency has experienced a staggering 40% decrease from its peak this year, and technical indicators suggest it may soon dip below the $1 threshold.

Factors Contributing to XRP’s Decline

Regulatory Delays Impacting Market Sentiment

The recent downturn in XRP’s price can be attributed to several key factors. Firstly, the U.S. Securities and Exchange Commission (SEC) postponed its decision regarding the Franklin Templeton XRP ETF last week, citing the need for additional evaluation. Despite this setback, some traders remain optimistic, with Polymarket indicating an over 80% chance of a spot XRP ETF approval by the end of the year.

Broader Market Influences

Secondly, XRP has been adversely affected by a broader downturn in the cryptocurrency market, largely driven by escalating geopolitical tensions in the Middle East. This situation has led to a correction in Bitcoin’s value and has pushed numerous altcoins into bearish territory.

Challenges in Decentralized Finance

Lastly, the XRP Ledger is facing challenges within the decentralized finance (DeFi) sector. Recent on-chain data reveals that the total value locked in the XRP ecosystem has decreased by more than 12.5% over the past month, now standing at $54.2 million. Additionally, its stablecoin supply is at $71 million, significantly lower than newer blockchain platforms like Sonic and Berachain.

Technical Analysis Indicates Potential Further Decline

Current Market Trends

The daily price chart for XRP illustrates a persistent downtrend over recent months, with the token dropping from $3.40 in January to approximately $2 today. Currently, XRP has reached the 50% Fibonacci retracement level at $1.8990, reflecting a 45% decline from its highest point this year. The token has also fallen below both the 50-day and 200-day Exponential Moving Averages.

Bearish Patterns Emerging

A significant observation is the formation of a descending triangle pattern, which is typically seen as a bearish continuation signal. Historically, this pattern suggests that further declines may occur once the lower support level is breached. The price target for this descending triangle can be determined by measuring its height at the widest point and projecting that distance downward from the breakdown level.

In this scenario, the anticipated move indicates a potential 43% drop from the triangle’s base, setting a target around $1.08. A decline below this level would heighten the likelihood of XRP falling beneath the critical psychological barrier of $1.

Resistance Levels to Watch

Conversely, if XRP manages to break above the resistance level at $2.20, it could invalidate the current bearish outlook and open the door for potential gains in the future.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.