XRP Price risk drops more than 25% in the coming weeks due to a multi-month bearish setup and concerns surrounding an oversupply of XRP.
XRP descending triangle
XRP has been consolidated inside descending triangle since topping out at the second-highest to date – near $1.98 – in April 2021.
In doing so, the XRP/USD pair has left a string of lower highs above its upper trendline while finding solid support around $0.55, as shown in the chart below. map below.
For the week ending March 13, Price of XRP once again testing the upper trendline of the triangle as resistance, raising the alarm that the coin could experience another move against the support trendline of the pattern near $0.55, 25% to 30% off.
The bearish outlook also takes cues from other bearish catalysts that have emerged around the triangle resistance.
Example: XRP has formed discount hammer on March 12, a single candlestick with a small body and long wick upward, showed lower buying pressure near the coin’s weekly high of around $0.85.
Additionally, the price turned lower after testing the confluence of resistance levels identified by the 20-week exponential moving average (20-week EMA; green wave) and 50-week EMA (red wave), as shown in the attached image below.
Oversupply of FUD
More unfavorable signs for XRP emerge after Ripple Labs locked 800 million XRP deposit as part of its programmed withdrawal schedule.
The blockchain payments company moved around 100 million XRP worth nearly $40 million to a wallet exchange on March 3. Meanwhile, it kept another 700 million XRP (worth around $550 million) in one account. margin, raises the prediction that at least 200 million XRP will flood the market to fund Ripple’s operating expenses, as well as distribute XRP among Ripple’s global customers.
Meanwhile, it keeps another 700 million XRP (worth around $550 million) in an escrow account, raising predictions that at least 200 million XRP will enter the market to fund Ripple’s operating expenses, as well as distribute XRP among Ripple’s global customers.
I understand there are about 800 million $ XRP locked and ready to sell… someone should check the increase in circulating supply to verify this
– Shyan (@tayshyan) March 12, 2022
The fear of a sell-off stems from the previous reaction of the XRP price to an unexpected supply increase. For example, XRP/USD fell more than 50% to nearly $0.60 in four months after its net supply in circulation increased from 40.46 billion to over 47 billion in just two days.
However, Ripple’s withdrawal of 800 million XRP has yet to be reflected in its net circulating supply.
Risk of taking profits increases
Another catalyst that suggests the price of XRP could drop 25-30% to reach its descending triangle target is the Santiment indicator that tracks social media trends and their impact on market trends. .
Santiment notes that the price of XRP has increased by more than 15% from the previous week on March 12, coupled with a spike in social media searches for the hashtag #XRPNetwork, suggesting that it could be next. with a potential sell-off ahead. Excerpt:
“Historically, our social trends indicate that it makes sense to take a profit whenever the crowd makes #XRPNetwork the top topic.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move is risky, you should do your own research when making your decision.
https://cointelegraph.com/news/3-reasons-why-xrp-price-could-drop-25-30-in-march 3 reasons why XRP price could drop 25%-30% in March