XRP Faces 50% Plunge Risk as Key Support Level Looms

XRP, a prominent cryptocurrency, is currently experiencing a significant decline in price, prompting analysts to issue warnings about potential further losses. The cryptocurrency has been under considerable pressure, and if the $2 support level is breached, experts predict that XRP's price could plummet to even lower levels, possibly dropping below $1.

Market analyst Steph has identified a classic "Head and Shoulders" pattern forming in XRP, which is a well-known bearish signal. This pattern suggests that if the $2 support level is lost, the price could face a substantial downturn. The formation of the left shoulder, head, and right shoulder has become more apparent, with the price hovering near the $2 mark. If XRP's price falls below this critical level, further declines are likely to follow. Steph emphasized the importance of confirming the breakdown with a daily or weekly candle close below the $2 level. At the time of the analysis, XRP was trading at $2.14 after briefly dipping to $1.92. Despite a brief recovery, analysts caution that downward pressure may continue if XRP fails to hold the $2 support.

If XRP loses the $2 support level, the price could fall to between $1.20 and $1.17, based on the length of the head in the Head and Shoulders pattern. This level is significant because it aligns with historical trading volume observed in November 2024. If the market confirms this breakdown with increased trading volume, the bearish outlook could become a reality. Analysts also warn that if XRP's price dips below $1.20, the situation could worsen, with some projecting a price as low as $1.00 or even lower. Should the XRP price fall below the $1 support level, analysts suggest setting buy orders below $1 to take advantage of potential short-term gains once the price stabilizes. Concurrently, XRP’s cumulative volume delta (CVD) has turned negative, indicating that more selling pressure is outweighing buying interest. While the risk of a flash crash to $0.90 is present, most experts agree that the chances of this scenario are low. Investors should watch for key levels like $1.20, which is considered a strong support level. If this support holds, there may be an opportunity for a recovery back to the $2 range.

XRP’s legal battle with the U.S. Securities and Exchange Commission (SEC) continues to influence its price. The case has been ongoing for several years, and while some reports suggest a resolution may be near, it remains uncertain how the outcome will impact XRP. If Ripple wins the case, it could lead to a rapid XRP price increase. However, if the company loses or faces further legal challenges, the price of XRP could face additional downward pressure. While the bearish outlook remains prominent, XRP’s momentum oscillator, the Relative Strength Index (RSI), is currently approaching a critical level that could signal a major breakout. In previous instances, similar RSI patterns have preceded substantial price increases, with one such occurrence leading to a nearly +500% surge in XRP’s price. Analysts also believe that Bitcoin’s price movements play a crucial role in XRP’s direction. If Bitcoin faces a significant decline, XRP price could experience a chain reaction, further pushing its price down. Consequently, as Bitcoin trades near the $83,000 mark, any substantial drop below the $72,000 support level could bring XRP prices closer to the $1.20 range, or even lower.