XRP, Ready to Collapse? 'Head and Shoulders' Completion Imminent, 19% Drop Warning

▲ XRP

An analysis suggests that XRP has entered a structurally bearish phase, forming a 'head and shoulders' pattern, a typical bearish reversal pattern, which is suppressing short-term upward expectations.

According to crypto media outlet BeInCrypto, a head and shoulders pattern, consisting of a left shoulder, head, and right shoulder, is clearly progressing on the XRP daily chart. The left shoulder formed at the end of February, followed by the 'head' which peaked around $1.6 in mid-March, and currently, the right shoulder is forming in the approximately $1.33 range.

The critical turning point for this pattern is the neckline, suggested to be around $1.26. If this support level breaks, it is estimated that an additional 19% decline could occur.

For a short-term rebound, the recovery of moving averages is presented as a necessary condition. The 20-day exponential moving average is located at approximately $1.35, and the 50-day moving average is at about $1.42. Specifically, an analysis suggests that a daily close above $1.35 would be interpreted as a significant upward signal.

However, there is considerable supply pressure hindering the rise. In the $1.45 to $1.47 range, approximately 1.24 billion XRP in selling volume is concentrated, making it highly probable that break-even selling pressure will flood the market if the price approaches this area. If this volume cannot be absorbed, upward attempts will inevitably be limited.

Conversely, at the lower end, a buying base of approximately 719 million XRP is formed in the $1.31 to $1.32 range, acting as short-term support. However, it is diagnosed that if selling pressure increases in this range, a neckline test could quickly materialize.

Pressure is also confirmed on the supply and demand side. Indicators showing exchange fund flows suggest that buying pressure has decreased by half compared to the end of March. This implies that the current rebound attempt is occurring without strong new capital inflow, and there is insufficient momentum to absorb large-scale selling volume.

Ultimately, for XRP to escape its structural bearishness, it needs to recover at least $1.35 and further break above the $1.6 'head' range. Conversely, if these conditions are not met, the ongoing formation of the right shoulder will be completed, and the technical bearish pattern is highly likely to materialize, according to the analysis.

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