According to Cointelegraph, XRP's price has continued to decline following last week's sharp sell-off, with the altcoin trading at $2.78 on Monday, marking a 1.78% decrease over the past 24 hours. The broader crypto market's risk-off sentiment and reduced onchain activity suggest that XRP may remain in a downtrend for the next week or two. However, a reversal could occur if key support levels are maintained.
Investor caution is evident as the Crypto Fear & Greed Index has dropped into the 'fear' zone at 46, down from 'neutral' levels last week and 'greed' levels seen 30 days ago, according to data from Alternative.me. This growing fear is mirrored in the declining onchain activity, with active addresses on the XRP Ledger plummeting to approximately 19,250 on Monday from 50,000 in mid-July. The metric, which tracks the number of wallets actively interacting with the XRP Ledger, indicates a reduced risk appetite, leaving XRP susceptible to sell pressure. Additionally, the futures open interest has seen a significant pullback to $7.7 billion from $10.94 billion over the same period, suggesting a lack of investor conviction and potentially increasing the likelihood of the downtrend persisting in the short term.
Despite weak fundamentals, the technical setup suggests a possible rebound if the support at $2.70 holds. Otherwise, XRP could experience an extended drawdown toward $2. The price chart has been forming a descending triangle pattern since its July rally to a multi-year high of $3.66, characterized by a flat support level and a downward-sloping resistance line. This pattern is typically seen as a bearish reversal indicator, resolving when the price breaks below the flat support level and falls by the triangle's maximum height. Bulls are struggling to keep XRP above the triangle's support line at $2.70. If successful, the price could rise to break the upper trendline at $3.09, coinciding with the 50-day simple moving average and the 0.618 Fibonacci retracement level, potentially triggering a rally toward the apex of the prevailing chart pattern around $3.70.
Failure to maintain the $2.70 support could lead to another sell-off, with the first line of defense provided by the demand zone between $2.6 (the 100-day SMA) and $2.48 (the 200-day SMA). A breakdown of this level could see XRP's price fall toward the downside target of around $2.08 over the next few weeks, representing a 25% decrease from current levels. The liquidation heatmap shows XRP buyers stepping in at $2.70, with large clusters of ask orders between $2.87 and $3.74. As Cointelegraph reported, XRP's Moving Average Convergence Divergence (MACD) indicates a potentially bearish crossover in September, risking a drop toward $2.17. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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