The price of Ripple (XRP) has spectacularly increased by more than 300% in the past two months, reaching $2.10 on December 27, 2024. However, warning signs indicate that the cryptocurrency XRP may collapse by at least 25% in the coming days.
Cryptocurrency: XRP may soon drop 25%!
The cryptocurrency XRP is currently in a descending triangle pattern, a bearish structure that often indicates a new decline. This pattern is characterized by a series of lower highs forming the downward trend line of the triangle, while the $2.10 level acts as horizontal support. A decisive break below this support level could pave the way for a deeper correction. In other words, Ripple (XRP) could drop to around $1.64 in January 2025, a decrease of about 25% from the current level.
On-chain data reinforces this bearish outlook. Notably, the supply of XRP held by cryptocurrency whales – those with balances of over one million tokens – has decreased by 180 million since early December. Similarly, the supply held by entities with balances of 100,000 XRP has dropped by 170 million. This supply decline from both groups of addresses aligns with the more than 26% price drop of XRP from its local peak of $2.90.
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Ripple reserves increase on Binance
Furthermore, XRP reserves on Binance, the largest cryptocurrency exchange by volume, have steadily increased since mid-December, a signal that is often bearish as it typically precedes price corrections. Unless this trend reverses, all of this suggests that the price of XRP could drop by 25% in the coming days.
In summary, although XRP has seen impressive growth recently, becoming the 3rd largest cryptocurrency by market capitalization, warning signs indicate the potential for a short-term correction. Cryptocurrency investors should be cautious and closely monitor developments to adjust their strategies accordingly.
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