XRP Warning Signals Critical Level

What to Know:

• Analyst warns XRP faces key resistance levels that could lead to either a brief rally or a correction.
• XRP’s price action is closely tied to both technical Fibonacci levels and regulatory developments in the U.S.
• Institutional investors should monitor these levels and policy changes for potential entry or exit points, given XRP’s historical sensitivity to regulatory news.

XRP is navigating a critical juncture, according to recent analysis. Short-term traders should be wary as the cryptocurrency approaches major resistance levels that could either support a brief move higher or trigger a near-term correction. This analysis arrives as U.S. crypto legislation faces delays, adding another layer of uncertainty to XRP’s price action. Both price signals and policy developments should be closely watched as XRP nears a potential turning point.

XRP Approaching Key Fibonacci Levels

According to a recent technical analysis, XRP has closely respected Fibonacci levels during its recent advance. The token reached approximately $2.17 recently, bringing it closer to an important decision zone. The 0.236 Fibonacci level near $2.27 is the next key area, where XRP could either face rejection or briefly move higher before renewed selling pressure emerges.

A rejection at this level would signal weakening momentum, while a move toward $2.40 could mark a final push higher. The $2.40 level could form a double top — a bearish pattern that occurs when prices fail to break a resistance level twice. After XRP surged to $2.40, the token declined sharply and eventually fell to near $2.00, so a revisit to the $2.40 region that stalls could strengthen the case for a short-term correction.

Regulatory Uncertainty Adds to Volatility Risk

Political and regulatory uncertainty in the United States represents a key source of potential volatility. Delays related to the CLARITY Act, upcoming markup votes, and political developments in Washington, D.C., could weigh on sentiment and prompt profit-taking. The U.S. Senate Banking Committee recently canceled the markup of the CLARITY Act after Coinbase publicly withdrew its support for the bill.

XRP Historical Reaction to Delayed Regulation

XRP has historically been highly sensitive to regulatory news. Periods of optimism around legal clarity have often fueled strong rallies, while delays or ambiguity have triggered volatility or consolidation. For example, XRP surged in anticipation of a swift resolution to Ripple’s long-running legal battle. However, following delays in that resolution and broader macroeconomic pressures, the price retraced significantly. This reinforces the asset’s strong correlation with regulatory developments.

Potential Double Top Formation

The analyst also warned that $2.40 could form a double top — a bearish pattern that occurs when prices fail to break a resistance level twice. For context, after XRP surged to $2.40 on January 6, the token declined sharply and eventually fell to near $2.00. Since then, XRP has rebounded and is currently trading slightly below the previous day’s peak. If the price revisits the $2.40 region and stalls, it could strengthen the case for a short-term correction.

Navigating XRP’s Near-Term Trajectory

Institutional investors should closely monitor XRP’s reaction to the $2.27 and $2.40 levels, as these could present opportunities for strategic entries or exits. Given the regulatory overhang, any adverse policy news could amplify downside risks. While technical indicators suggest a potential for further upside, regulatory headwinds could quickly shift the market’s dynamics.

Related: Bitcoin Signals Oversold; Crypto Market Review

Source: Original article