XRP Faces 14.02% Weekly Drop, Tariffs Fuel Bearish Sentiment

There is a distinct possibility that XRP falling below $2 could soon become a reality. The anticipated "Liberation Day" tariffs, set to be announced by former U.S. President Donald Trump, are expected to have an indirect impact on the cryptocurrency market, particularly on XRP. These tariffs, while not directly affecting the cryptocurrency market, are likely to increase fears of inflation, heighten the possibility of a recession, and reduce the likelihood of rate cuts. This economic uncertainty tends to make investors more cautious, leading to a selloff of risk assets and a shift towards more conservative holdings.

At the time of reporting, XRP was trading at $2.12, with a 14.02% drop on the weekly chart, bringing year-to-date gains down to 1.91%. Despite a significant legal victory, recent events have not provided enough momentum to sustain an upward trajectory for XRP. The token has lost approximately $26 billion in market capitalization since the conclusion of the SEC case. The $2 mark is now a crucial and psychologically important support level for XRP. With the tariff announcements looming, crypto traders have turned bearish, increasing the likelihood of XRP's price falling below $2, especially if investors continue to offload risk assets.

Short positions outnumbered long positions on April 1 and April 2, with the long/short ratio of XRP standing at 0.93, and 51.62% of newly opened positions being short sales. Additionally, on April 1, Ripple unlocked 500 million XRP, with another 500 million on the way. This increase in supply could exert additional downside pressure on XRP. While the near-term outlook remains bearish, technical analysts suggest that the token's long-term prospects are intact, with a possible channel up formation that could outline a pathway to levels as high as $6.50. However, significant volatility is expected in the coming days, and readers should exercise caution.

The recent volatility in the cryptocurrency market, particularly surrounding XRP, has been influenced by the anticipated "Liberation Day" tariffs. These tariffs have sparked significant short-selling activity, which could potentially drive the price of XRP below the $2 mark. XRP, which has been consolidating around the $2 level, faces considerable selling pressure at its moving averages. Technical analysis indicates that a breach below this support level could lead to further declines. The price of XRP has already experienced a sharp selloff, dropping below $2 before finding support at $1.90. Despite a slight recovery to end at $2, the overall sentiment remains bearish.

The broader cryptocurrency market is also bracing for the impact of these tariffs. Analysts predict that if the price of XRP falls below $2, it could complete a bearish head-and-shoulders pattern, with minor support at $1.77. If this level is breached, the price could plummet to $1.27. To prevent this downside, bulls need to drive the price above the moving averages quickly. However, any bounce is expected to face selling pressure at these levels, heightening the risk of further declines. The overall market sentiment remains cautious, with traders closely monitoring the impact of the tariffs. The volatility surrounding the tariffs has led to a sharp selloff in XRP, pushing it below $2 before finding support at $1.90. Despite recovering slightly to end at $2, the price of XRP remains under pressure, with technical indicators suggesting further declines if key support levels are breached. The market's reaction to the tariffs will be crucial in determining the short-term trajectory of XRP and other digital assets.