- XRP’s 300% rally faces risks of a 25% correction due to bearish technical patterns.
- Whale selling pressure is increasing, flooding the market with supply and contributing to price declines.
- Rising XRP reserves on Binance signal a potential price correction, reinforcing bearish market sentiment.
Ripple’s XRP has skyrocketed over 300% in the past two months, with a price of $2.10 on December 27. This sharp rise is impressive, but warning signs are appearing that could signal a price drop. Let’s take a closer look at the risks that may be ahead for XRP holders.
XRP Faces a Potential Breakdown: A Bearish Pattern Forms
Ripple’s XRP recently showed signs of weakness, forming a descending triangle pattern. This chart pattern usually leads to further price drops. The descending triangle occurs when price action creates lower highs, with strong support around $2.10.
If this support level fails, a decline could follow. According to technical analysis, a breakdown from $2.10 could push the price down to about $1.64. This would mark a 25% drop, causing potential losses for short-term investors.
Whale Selling Pressure and Rising Exchange Reserves
Onchain data highlights the behavior of large XRP holders, or whales. Since December, wallets with over 1 million XRP have reduced their holdings by 180 million. Meanwhile, wallets with 100,000 XRP have sold off 170 million tokens.
This selling pressure has contributed to XRP’s 26% drop from its local high of $2.90. Whale selling floods the market with additional supply, which often leads to price declines. Another troubling signal is the rise in XRP reserves on Binance, the largest exchange.
Increased exchange reserves often precede price corrections. For now, XRP is likely to face further downward pressure if the selling pressure persists. Investors should be cautious, as the combination of rising supply and whale selling could push prices lower in the near future.
