Where Can XRP Price Drop After Dipping Below $2?

Summary: XRP has seen a recent decline, trading at $1.93 after dropping 3% in 24 hours. A megaphone pattern suggests potential for further price correction, with forecasts indicating a possible target of $0.88. Increased selling pressure is pushing many investors to sell at a loss, reminiscent of previous market trends.

Key Takeaways

XRP's weekly chart shows a megaphone pattern aiming for $0.88.
Increased selling pressure is causing investors to sell their XRP holdings at losses.
The price has dropped to $1.93, heightening concerns about further declines.

XRP has continued on a downward trajectory, falling by 3% over the past 24 hours to a price of $1.93. The failure to maintain levels above $2 has raised concerns among traders regarding the potential for further declines.

XRP/USD one-hour chart. Source: Cointelegraph

Where Can XRP Price Drop After Dipping Below $2?

XRP's Potential Price Target of $0.88

The XRP/USD pair is forming a megaphone pattern on the weekly chart, indicating a deeper correction may be forthcoming. A megaphone pattern, sometimes referred to as a broadening wedge, arises when the price showcases a series of higher peaks and lower troughs. Technically, a breakout below the lower boundary of this pattern could trigger a significant decline.

Once the price surpasses the lower trend line near $1.80, the pattern will be validated. The projected target for this setup turns out to be $0.88, representing a potential 54% decrease from the current price.

XRP/USD daily chart. Source: Cointelegraph

Before reaching this target, key levels to monitor include the 100-week simple moving average (SMA) at $1.60 and the 200-week SMA at $1.05. The weekly RSI has also moved down to 39 from a previous overbought level of 91 recorded in December 2024, suggesting a steady increase in downward momentum.

Moreover, XRP's Net Unrealized Profit/Loss (NUPL) has shifted from feelings of euphoria to denial, with anxiety now emerging among investors.

XRP’s NUPL vs price performance chart. Source: Glassnode

As over 41.5% of XRP holders currently find themselves at a loss, there is a heightened risk that many will look to sell their holdings, adding to the existing sell-side pressure. Similar scenarios in 2018 and 2021 were followed by sharp corrections, so there are concerns about potential similar pullbacks in the upcoming weeks.

Rising Realized Losses

XRP recently plummeted to an intraday low of $1.81, levels not seen since April, according to data from Cointelegraph Markets Pro and TradingView. Continued selling pressure is pushing many to part with their investments at a loss, echoing sentiments from past market crashes.

Realized losses for XRP have spiked to seven-month highs, as reported by blockchain data platform Glassnode. They noted that "the 30D-EMA of daily realized losses has surged to approximately $75 million per day," indicating increasing investor distress.

XRP realized loss. Source: Glassnode

These observations surfaced just moments before XRP fell below the $2 mark, marking a 50% drop from its multi-year peak of $3.66 seen in mid-July. According to Cointelegraph, a lack of on-chain demand and ongoing profit-taking activities by large investors or "whales" could further increase the risks of a sell-off in XRP.