The price of XRP is down 18.5% from its local high of $0.67 on November 23, and the cryptocurrency’s sell-off is likely to increase in the coming weeks.
XRP Technical Hints on Extended Correction
XRP (XRP) has not broken above the downtrend line resistance since January 2018, and has yet to record a break above it in November 2023, showing psychological selling pressure around the line.
After testing descending trendline resistance, each bearish rejection has historically led to a decline toward the rising support trendline.
The downside target appears to be around $0.50, which interestingly is closer to XRP’s 50-week (red wave) and 200-week (blue wave) exponential moving averages (EMAs). Therefore, if this fractal occurs, the price of XRP risks falling 20% before 2024.
Potential XRP could be transferred to exchanges
XRP’s bearish outlook picks up further clues from supply distribution data that tracks the wealthiest groups.
In particular, the supply of XRP held by addresses with balances between 1 billion and infinity tokens (black wave) has increased by 1.75% since November 20th.
A significant portion of these addresses may belong to cryptocurrency exchanges, indicating that investors are moving their XRP holdings to trading platforms for sale.
Historical data shows that surges in the 1 billion infinity XRP token cohort occur moderately and precede large price declines (red waves). Conversely, the recent decline in collective supply, indicating exchange outflows, preceded the rise in XRP’s price, which rose from $0.55 to $0.68.
XRP fund data also shows risk-taking behavior among institutional investors. According to CoinShares, XRP-related investment vehicles experienced outflows worth $2.6 million in November.
Interestingly, other cryptocurrencies also saw inflows over the same period, with Bitcoin (BTC) leading the charts.
Are the XRP bulls over?
XRP price has soared in 2023, generating an 80% return for investors as of November 23. A partial legal victory over the U.S. Securities and Exchange Commission (SEC) and Bitcoin ETF euphoria were the biggest contributors to the annual gain.
Related: Why Is XRP Price Up Today?
As a result, the ongoing XRP price decline looks like a bull market correction. This means that some investors are selling XRP near local price peaks to secure profits, but the overall upward trend remains intact.
Trade analysts expect XRP to resume its bullish trend, with Muro saying it could rise to $0.80, a 30% increase from current price levels.
Like ETH and SOL, it is poised to break out and go with or without a retest of the consolidated low. pic.twitter.com/92pIeOZZP7
— Muro (@MuroCrypto) November 23, 2023
CryptoBull expects XRP to reach $4.20 in 2024, citing the cryptocurrency’s past breakouts following months of consolidation within a triangle pattern.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.