XRP News Today: XRP Faces 14% Drop as Bearish Pattern Confirmed, Open Interest Falls 18%

XRP, the cryptocurrency, is currently facing significant downward pressure as a classic bearish chart pattern has been confirmed. The head-and-shoulders pattern, which is a well-known bearish reversal pattern, has formed on the four-hour chart of XRP since May 9. This pattern consists of three peaks: a higher peak (the head) and two lower peaks (the shoulders). The pattern is resolved when the price breaks below the neckline, which is the line connecting the lows of the left and right shoulders. In XRP’s case, the pattern was validated following a break and close below the neckline at $2.33 during the early Asian trading hours on May 19.

If the price stays below the neckline, the XRP/USD pair could slide further to $2.25, where the 200-day simple moving average currently sits, and then to the pattern target of $2.00. This would bring the total losses to 14% from the current levels. According to the analyst Egrag Crypto, XRP price “must hold” the support at $2.30, which aligns with the H&S neckline, to avoid a breakdown toward these targets. A drop below $2.30 could trigger a massive sell-off, with the initial target set around $2.15 and then as low as $1.60.

In addition to the bearish chart pattern, XRP open interest (OI) has decreased by 18% to $4.49 billion over the last five days. This decline in OI signals reduced trader confidence and liquidity, which drives prices down. The latest drawdown in XRP price has also triggered liquidations over the last day, where long positions valued at $12 million were forcibly closed, compared to just $1.4 million in shorts. This reflects heightened selling pressure as bullish traders are forced to sell at a loss, further pushing prices lower.

XRP’s 3% drop over the last 24 hours is accompanied by a 70% increase in daily trading volume to $4.1 billion. Trading volume increases amid a price decline can be interpreted as increasing bearish momentum or repositioning by crypto traders as they wait for XRP’s next move. The current situation suggests that XRP is at risk of falling to $2, and traders should be cautious when considering their positions in the cryptocurrency.