XRP Risks 40% Drop if $2 Support Level Fails to Hold
- XRP is testing the $2 level amid a 46% drop in trading volume to $4.08B.
- Head-and-Shoulders pattern signals risk of 40% drop to $1.20 if $2 fails.
- Derivatives data shows $9.57M liquidated; open interest rose 2.84% to $3.13 billion.
XRPs price continues to face pressure at the $2 threshold, a level that now holds critical importance for its short-term direction. On Friday, the asset briefly dipped to $1.90 before recovering to trade back at $2.00. Despite the rebound, daily trading volume has dropped by 46%, down to $4.08 billionsignaling weakening investor interest.
Rising global economic uncertainty and renewed tensions from the ongoing US-China tariff situation have added to the challenges facing the overall crypto market. These outside pressures have made it difficult for XRP to benefit from recent positive developments, including progress in its legal case with the U.S. Securities and Exchange Commission (SEC).
Meanwhile, a widely followed technical pattern on XRPs chart is raising further concern. Analyst Ali Martinez recently posted on X that $XRP appears to be retesting its breakout zone before the trend continues! In the chart he shared, the cryptocurrency is showing a Head-and-Shoulders patterna setup that often suggests a potential reversal in price direction.
XRP Technical Structure Faces Critical Moment
The Head-and-Shoulders pattern began with a left shoulder near $2.60, peaked at $3.60, and formed a right shoulder back at $2.60. After dropping below the neckline at $2.04, XRP declined to $1.80 before recovering slightly. If the price fails to stay above $2, it could trigger further selling pressure and lead to a fall toward $1.20. That would represent a 40% drop from its current level.
However, the 200-day Exponential Moving Average (EMA) is offering support at $1.94. If XRP closes above $2 on the daily chart, it would suggest some strength in its technical structure and might encourage renewed buying. If that happens, a move toward $2.25 could follow, which is the area where the 50-day and 100-day EMAs intersect.
Meanwhile, the Relative Strength Index (RSI) has risen from near-oversold levels to 44. However, it remains below a descending trendline from its yearly high of $3.39. For a sustained rally, the cryptocurrency must break above this trendline. Until then, the trend remains under pressure, and gains may be limited.
Derivatives Data Reflects Market Uncertainty
Recent data from derivatives markets shows that traders are cautious. In the past 24 hours, XRP saw total liquidations of $9.57 million. Long positions lost $5.28 million, while short positions accounted for $4.29 million. This suggests that traders betting on price increases suffered greater losses than those expecting a decline.
At the same time, open interest in XRP derivatives increased by 2.84% to reach $3.13 billion. This rise may indicate growing capital inflows and slightly improved sentiment, even as price action remains uncertain.
If XRP holds above $2 and breaks through resistance levels, it may resume its upward move toward $2.60 and $3. If not, the risk of a steep decline to $1.20 remains a serious possibility.
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Read more: https://www.tronweekly.com/xrp-risks-40-drop-if-2-support-level-fails/
Text source: TronWeekly
