Crypto Analyst Forecasts Potential XRP Price Drop Before Recovery

In recent days, XRP's price movements have sparked discussions among cryptocurrency traders about the possibility of a decline below the $2 support level. A key question on many minds is just how far XRP might drop before establishing a bottom and if a return to the $1 mark is feasible under the current market conditions.

Key Takeaways

Analyst Zach Rector believes that XRP dropping to $1 is highly unlikely under normal circumstances.
The order book indicates strong buying interest above $1, suggesting a support base for XRP.
Rector suggests that if XRP falls below $2, the most realistic downside targets are between $1.90 and $1.80.

XRP

Insights from Analyst Zach Rector: Is $1 XRP Possible?

Zach Rector, an influential analyst in the XRP space, discussed the concerns surrounding XRP's price during an interview on the Paul Barron Podcast. He expressed that selling pressures on centralized exchanges have largely counterbalanced the inflows into XRP ETFs, maintaining the cryptocurrency's price just above the $2 threshold. This situation raises questions about XRP’s potential to slip below $2 and possibly test the $1 level.

In response to an inquiry about the likelihood of XRP reaching $1 again, Rector stated that such a movement is nearly out of the question unless an extreme event, like a black swan event, occurs. He emphasized that the current market dynamics do not indicate a drop to that level.

According to Rector, the XRP order book is now filled with passive buyers who have set up limit orders significantly above the $1 mark. He highlighted his own trading activity to support his belief that XRP is establishing a stronger long-term price floor. Rector shared that he had purchased XRP long above $3.40 earlier in the year and has since brought his average cost down to about $2.23 through consistent dollar-cost averaging.

Assessing Support Levels: Higher Lows Indicate a Stable Range

Rector pointed out that XRP's price behavior over the last year indicates a market that is gradually gaining strength rather than succumbing to significant declines. Focusing on XRP's price chart from Coinbase, he noted a pattern of higher lows being formed, including a price low of approximately $1.60 in April and subsequent higher lows at around $1.77 on October 10 and $1.81 in November.

Because of this pattern, it is likely that the optimal downside target for XRP, should it breach $2, falls between the $1.90 and $1.80 range. Rector warns that if XRP dips below $1.90, it may briefly test the $1.80 level, although he believes this would still align with the overall upward trend in XRP's price structure.

XRP XRP trading at $1.99 on the 1D chart | Source: XRPUSDT on Tradingview.com

In summary, while market conditions seem precarious, the possibility of XRP dropping to $1 appears slim. Instead, traders should focus on key support areas as potential points of rebound.