Ripple (XRP) price faces possible losses in the coming weeks as it breaks out of a “descending triangle” pattern, with its bias to the downside.
A major downside breakout is underway for XRP
To recap, XRP started to form the technical structure after reaching $1.98 in April 2021, its second highest level to date. In doing so, the token trended lower within a range defined by a descending resistance trend line and a horizontal support trend line.
On May 16, 2022, XRP broke below the support trend line of the triangle, accompanying a decent increase in trading volumes.
The move confirmed the descending triangle as a bearish reversal indicator. Meanwhile, as a technical analysis rule of thumb, XRP is now at risk of extending its bearish move by as much as the maximum height of the triangle when measured from the breakout point, as shown below.
This could see the XRP token drop to $0.18 in July 2022, down nearly 40% from its June 1 price.
The current massacre of the crypto market
XRP’s bearish setup comes amid a general slump the crypto market is going through, with some tokens currently trading more than 90% below their all-time highs set last year.
The violent nosedive began in May after Terra (LUNA), now known as Luna Classic (LUNC), a $40 billion “algorithmic stablecoin” project, collapsed due to its system failure keeping it pegged with The U.S. dollar. This debacle found its match at Celsius Network, one of the largest cryptocurrency lending platforms, which unexpectedly paused cryptocurrency withdrawals in June due to “extreme market conditions.”
Since then, the cryptocurrency market has faced one bad news after another, from the potential insolvency of crypto hedge fund giant Three Arrow Capital due to bad debts and risky trades to the suspension of withdrawals by crypto lender Babel Finance. due to liquidity problems.
Babel Finance ä¹Ÿæš‚å œäº†æ 现业务 pic.twitter.com/9Nk1gkEmVz
— 0xEdson | web3 (@0xEdsonCrypto) June 17, 2022
Macroeconomic risks also favor the downside outlook for XRP with the Federal Reserve raising interest rates by 0.75% on June 15, ensuring less liquidity for investors to speculate on risky assets.
Nonetheless, Kevin Cage, who runs Iron Key Capital, a cryptocurrency-focused hedge fund, says that XRP will “survive” the bear market.
I know for a fact that no matter how hard it gets, $XRP will survive future bear markets.
XRPL is 10 years old. Tried & true.
Ripple expanding, new partners every week, hiring 300 more people
They want clarity and will fight until the end.
SEC chose the wrong company to fight
— Kevin Cage (@Kevin_Cage_) June 14, 2022
Meanwhile, Bleeding Crypto says that XRP could drop towards $0.17, but anticipates that the token would experience a sharp rebound after reaching said level.
“Looks like it may go for a full reset of this last bull run,” wrotehinting that XRP would recapture the $1.95 and $1.98 range during the next trend reversal.
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