XRP's Price Drops 15% After Parabolic Rally

XRP's weekly chart, spanning approximately 100 candlesticks, provides a detailed view of its price movements, technical patterns, and potential market directions. From early 2024 to mid-Q4, XRP traded within a low-volatility range. However, a significant breakout occurred around October 2024, marked by large bullish candlesticks that pushed the price from below $0.70 to nearly $3.80 in a sharp vertical rally. This parabolic run was unsustainable and led to volatility and consolidation, reflecting a classic blow-off top that is now being tested for a retracement phase or a possible continuation pattern.

Analyzing the Bollinger Bands (20, 2), it is clear that the price experienced a major expansion in late 2024 as XRP surged. The bands widened drastically during the bullish run, followed by a contraction as the price pulled back. Currently, XRP is trading closer to the middle band (SMA 20), which is around $2.40. The price has slipped below this midpoint, now hovering at approximately $2.08. This breach suggests a bearish tone in the short term unless the price can reclaim the SMA level convincingly. However, the lower Bollinger Band rests near $1.77, providing a potential short-term support area. The narrowing bands further signal reduced volatility and a possible squeeze, indicating that a major price move could be on the horizon.

The MACD (12, 26, close) confirms the fading bullish momentum. Following a bullish crossover in late 2024, the histogram surged positively, validating the rally. Recently, the MACD line has crossed below the signal line, now reading at 0.1844 against the signal’s 0.3107, with a negative histogram reading of -0.1264. This crossover signals weakening bullish strength and a potential shift to bearish control. If the MACD continues to diverge further downward, a deeper correction may unfold. However, the rate of decline is not accelerating drastically, hinting at a possible stabilization or a period of accumulation if strong buying returns near key support.

Currently, the price is forming what resembles a symmetrical triangle or a descending consolidation wedge, following the sharp uptrend. This structure often appears in continuation patterns but can also break downward in cases of failing volume or macro weakness. The rejection from $3.50 and the inability to reclaim $2.50 suggests that bulls are currently struggling. However, if the price holds above $1.77 and establishes a higher low in the coming weeks, a bullish breakout remains in play. With this being a weekly chart, even slight weekly movements can foreshadow strong directional shifts in subsequent candles.

Projecting over the next 100 weekly candlesticks, which spans roughly two years, the potential for renewed bullish cycles remains viable. If XRP can consolidate between $1.70 and $2.50 and reclaim the $2.80–$3.00 resistance zone, it could reattempt the previous high near $3.80. A breakout above this level could push the price toward $5.50–$6.00 based on the Fibonacci extension and previous rally symmetry. Conversely, a breakdown below $1.70 could drag XRP toward $1.00 or even retest the $0.70 zone from early 2024. Much of this depends on macro market conditions, including Bitcoin’s trajectory and regulatory developments.

As of today’s price at $2.0718 and considering the current candle structure, this week’s candle may likely close slightly bearish or as a doji if buyers defend the $2.00 zone. The declining MACD histogram, proximity to Bollinger’s lower band, and reduced volatility suggest indecision. If sellers increase pressure midweek and break below $2.00, expect a potential weekly close around $1.85–$1.90. On the upside, a reclaim of $2.20 could flip momentum for a weekly close above $2.30. Traders should watch closely for a volatility squeeze breakout and use this consolidation phase to plan entries with defined risks.