Key takeaways:
On-chain activity reduction and a decline in open interest suggest a potential further drop.
XRP technical analysis warns that if the $2.70 support level is breached, the price may fall to $2.
XRP price has continued the downward trend from last week's sharp sell-off. Reportedly, the altcoin traded at $2.78 on Monday, down 1.78% in the past 24 hours.
Market analysts point out that the overall risk-averse sentiment in the cryptocurrency market and the significant decrease in on-chain activity indicate that XRP may continue to be in a downward trend in the next week or two. However, if the key support level can hold, there is still a possibility of a price reversal.
According to data from Alternative.me, the cryptocurrency fear and greed index has dropped to 46 points in the "fear" zone, down from last week's "neutral" level and a month ago's "greed" level, reflecting an increase in cautious sentiment among investors.
This fear sentiment is clearly reflected in the reduction of on-chain activity, with the number of active addresses sharply declining from 50,000 in mid-July to about 19,250 on Monday.
The active address metric tracks the number of wallets actively interacting with the XRP ledger (XRPL) by sending or receiving XRP. Industry experts indicate that such a significant decline suggests a reduced market risk appetite, making XRP more susceptible to selling pressure.
The waning investor interest is also evident in the significant drop in futures open interest (OI), which fell from $10.94 billion to $7.7 billion during the same period.
Market analysts believe that the decrease in open interest indicates a lack of investor confidence, which may increase the likelihood of a continued downward trend in the short term.
Despite weak fundamentals, technical analysis suggests a possibility: if the $2.70 support level can hold, XRP price may see a rebound. Otherwise, the price may continue its downward trend, falling to around $2.
Since reaching a multi-year high of $3.66 in July, the XRP price chart has formed a clear descending triangle pattern on the daily chart, characterized by a flat support level and a downward-sloping resistance line.
Professional analysis indicates that a descending triangle pattern that appears after a strong upward trend is typically viewed as a bearish reversal signal. According to technical analysis principles, when the price breaks below the flat support level and falls to the maximum height of the triangle, the pattern dissipates.
Market bulls are striving to keep XRP above the $2.70 support line of the triangle. Analysts note that if the bulls successfully defend this position, the price is expected to rise and break above the $3.09 trend line, which coincides with the 50-day simple moving average (SMA) and the 0.618 Fibonacci retracement level.
This would confirm bullish momentum and could trigger a price rebound, reaching the peak of the current chart pattern at around $3.70.
If the price breaks below the critical $2.70 level, it may trigger a new wave of selling, with the first line of defense being the demand zone between $2.60 (100-day SMA) and $2.48 (200-day SMA).
If this important support zone is breached, XRP price is expected to target around $2.08 in the coming weeks, representing a 25% drop from the current price level.
Liquidation heatmap data shows that XRP buyers are actively entering at the $2.70 position. Meanwhile, a large number of sell orders are concentrated in the range of $2.87 to $3.74.
According to a previous report by Cointelegraph, the smooth moving average convergence divergence (MACD) technical indicator for XRP indicates a potential bearish crossover signal in September, posing a risk of falling to $2.17.
Related: Despite the decline in Bitcoin (BTC) and Ethereum (ETH) prices, crypto funds still recorded $2.5 billion in inflows.
This article does not contain any investment advice or recommendations. Any investment and trading activities involve risks, and readers should conduct their own research before making decisions.
Original article: “Analyst: Will XRP Price Drop to $2 or Reverse Upward?”
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
