XRP Drops 3.26% as Bearish Pattern Looms

XRP is currently at a pivotal juncture, testing critical resistance levels that could determine its near-term price trajectory. The cryptocurrency is trading at $2.26, reflecting a 3.26% decline at the time of writing. This price action is significant as it nears the neckline of a head-and-shoulders pattern, a technical formation that has investors on edge. The left shoulder of this pattern formed in late 2024, with the head reaching its peak in December. If XRP can avoid closing below the neckline and rise above the right shoulder, it could invalidate the bearish pattern, potentially leading to a bullish breakout and pushing the price toward $5. However, if XRP fails to break through this resistance, the bearish outlook could prevail.

XRP has several critical levels to watch for potential price action. The immediate support level is at $2.02, which has held strong in recent weeks. If XRP drops below this support, it may signal further downside. On the other hand, resistance near $2.95 is a significant barrier for XRP’s price. If the price breaks above this level, a strong bullish move could follow. Therefore, the market will likely react strongly around these key levels, determining the next move for XRP.

Despite the rise in daily active addresses, XRP’s transaction count has been falling. The latest data shows a decline to 604K transactions, suggesting that fewer users are engaging with the network. This decline in transaction volume may indicate weakening momentum, potentially tempering bullish expectations in the short term. Therefore, this trend suggests caution, as lower transaction activity could signal less market interest.

The MVRV ratio (Z score) for XRP has slightly dropped to 2.92, suggesting that the market was cooling off after recent gains. While the ratio remains positive, the slight decrease may indicate that XRP is approaching overbought conditions. However, the drop is not substantial enough to raise immediate concerns. Therefore, while the MVRV ratio points to a potential slowdown, it does not yet suggest a significant price correction.

XRP is more likely to face a bearish continuation at this moment. Despite the rise in daily active addresses, the falling transaction count and slight drop in the MVRV ratio point to weakening momentum. The head-and-shoulders pattern also indicates potential downside if