XRP retreated on Monday, reaching critical support levels, indicating the possibility of further declines in the coming days.
Ripple (XRP) has dropped to $2.40, nearly 30% down from this year's highest level, officially placing it in the bare market.
With Bitcoin (BTC) falling below $100,000, the sale coincides with the broader weakness of the crypto market. The Crypto Fear and Greedy Index fell into the fear zone at 38, but the Altcoin Season Index is also declining.
The technology suggests that XRP prices could crash further
XRP faces the risk of additional losses in the short term. Daily charts show prices fall below the 50-day and 100-day moving averages. This is a bearish signal that the seller is in control.
Additionally, XRP formed a head and shoulder pattern. It consists of two shoulders, a neckline and a head. Prices are now dropping to the diagonal neckline, coinciding with the powerful pivot inversion of Murrey Math Lines.
As a result, the next reference level is $1.79, the lowest swing this month, with a strong bearish breakdown likely. Movement below this level could be further reduced with the door open, with the next support being $1.6130, which corresponds to a Fibonacci retracement level of 61.8%.
If XRP rebounds above weak stops and reverse levels at $2.735, the bearish outlook is invalidated.
Wyckoff theory further refers to the downside
Another risk is that XRP prices have moved to the distribution stage of Wyckoff theory.
The weekly chart shows that the coin remained in most of the accumulation stages of last year, featuring lateral price action. It then entered the markup phase in November, and it surged by more than 400%.
Currently, XRP has moved to the distribution stage. A break below the neckline in the head and shoulder pattern confirms the transition to the markdown phase. This is marked by increased supply, reduced demand and panic sales from investors.
The XRP price has some bullish catalysts that could help you rebound. For example, SEC's decision to terminate Coinbase And the Robin Hood case is a sign that it does the same for ripples.
It is also increasing the likelihood that the Securities and Exchange Commission will approve the XRP ETF. These odds rose to 80%. This means that the agency may approve the funds. This estimates JPMorgan will attract more than $8 billion in funds this year.
