Key Takeaways
- •XRP's weekly chart exhibits a megaphone pattern, suggesting a potential target of $0.88.
- •Increasing selling pressure is leading many investors to realize losses on their XRP holdings.
XRP Downtrend Continues Under $2
XRP extended its downtrend on Friday, experiencing a 3% decrease over the preceding 24 hours and trading at $1.93. The inability to maintain a price above $2 has cast doubt on the altcoin's recovery prospects, prompting questions among traders about the extent of further declines.
Classic XRP Pattern Targets $0.88
The XRP/USD pair has formed a megaphone pattern on the weekly time frame, indicating that a more significant correction may be on the horizon for the altcoin. A megaphone pattern, also known as a broadening wedge, is characterized by the price forming a series of higher highs and lower lows. A technical rule suggests that a breakout below the pattern's lower boundary can trigger a sharp price drop.
For XRP, this pattern will be confirmed once the price breaks below the lower trend line, which is currently situated around $1.80. The measured target for this pattern projects a potential price of $0.88, representing a 54% decrease from the current trading level.
Key price levels to monitor before this target is reached include the 100-week simple moving average (SMA) at $1.60 and the 200-week SMA at $1.05. The weekly Relative Strength Index (RSI) fell to 39 on Friday, a notable decrease from the extremely overbought levels of 91 recorded in December 2024, signaling a steady increase in downward momentum during this period.
Concurrently, XRP's Net Unrealized Profit/Loss (NUPL) metric has shifted from a state of euphoria to denial, with anxiety now beginning to emerge.
With more than 41.5% of XRP holders currently experiencing unrealized losses at present prices, there is an increased probability of heightened selling pressure as investors choose to cut their losses. Similar market setups observed in 2018 and 2021 preceded sharp corrections, raising the possibility of comparable pullbacks in the coming weeks.
XRP Realized Losses Rise to Seven-Month Highs
XRP reached an intraday low of $1.81, a price level not seen since April, according to data from Cointelegraph Markets Pro and TradingView. This surge in selling pressure has compelled numerous investors to sell their holdings at a loss, drawing parallels to major historical market downturns.
Blockchain data platform Glassnode reports that realized losses on XRP have climbed to levels not observed since April. Glassnode stated in an X post on Friday that "The 30D-EMA of daily realized losses has spiked to about $75M per day."
Glassnode's observation was made shortly before XRP fell below the $2 mark, signifying a 50% decline from its multi-year high of $3.66 recorded in mid-July. As previously reported by Cointelegraph, a lack of on-chain demand and persistent profit-taking by large holders, often referred to as whales, could exacerbate XRP's sell-off risks.