XRP bearish outlook is driven by a mix of technologies that price could drop to $0.18 next
XRP price looks to the possibility of losses in the coming weeks as it breaks out of a “descending triangle” pattern, with the bias tilted to the downside.
XRP price technical breakdown boosts chances of a 40% drop by July
To summarize, XRP is starting to form a technical structure after hitting $1.98 in April 2021, it’s second high so far. The token is trending lower in the range defined by a bearish resistance trendline and a horizontal support trendline. On May 16, 2022, XRP broke below the support trendline of the triangle, which was accompanied by a significant increase in trading volume.
This move confirmed the descending triangle as a bearish reversal indicator. Meanwhile, according to the rule of technical analysis, XRP is now at risk of extending the downside move by the maximum height of the triangle as measured from the breakdown point.
XRP/USD weekly price chart featuring ‘descending triangle’ breakdown setup | Source: TradingView
This could cause XRP to drop to $0.18 by July 2022, down almost 40% from the price of June 1. XRP’s bearish setup comes amid a larger sell-off in the crypto markets, with several tokens trading 90% below the record highs last year.
The massive tailspin began in May after Terra (LUNA) — now known as Luna Classic (LUNC) — a $40-billion “algorithmic stablecoin” project, collapsed due to the failure of its staking system. This debacle found its match in Celsius Network, one of the largest crypto lending platforms, which unexpectedly paused crypto withdrawals in June over “extreme market conditions.”
Babel Finance 也暂停了提现业务 pic.twitter.com/9Nk1gkEmVz
— 0xEdson | web3 🏖 (@0xEdsonCrypto) June 17, 2022
Since then, the crypto market has faced one bad news after another, from the potential default of crypto fund giant Three Arrow Capital due to bad debts and risky transactions that caused Cryptocurrency lending company Babel Finance to stop withdrawing due to liquidity issues. Macro risks also favor XRP’s bearish outlook, with the Federal Reserve raising interest rates by 0.75% this June 15, ensuring lower liquidity for speculative investors.
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