XRP Signals Bottom After Brutal Drop

What to Know:

• XRP has broken key support levels, signaling a shift from a range-bound environment to a liquidity-driven unwind.
• The breach of the $1.2 level and subsequent sharp sell-off indicate strong bearish momentum and a lack of buy-side support.
• The current interaction with the $1.00 demand zone is critical for potential stabilization, impacting short-term liquidity and future price action.

XRP has recently experienced a significant shift in its trading pattern, moving away from a corrective phase into a more pronounced liquidity-driven decline. The digital asset has broken through critical support levels, indicating a potential for further downside. This analysis delves into the technical factors driving this movement, examining key price levels and structural indicators to provide a clearer outlook for institutional investors.

Daily Chart Analysis: Breakdown Confirmed

The daily chart reveals a decisive breach of the $1.2 support, a key swing low that previously held firm. This breakdown confirms a structural shift, suggesting the sell-off is not merely a temporary deviation but a more significant trend. The speed and intensity of the decline following this breach highlight strong selling pressure and a lack of substantial buy-side support.

Critical Demand Zone at $1.00

XRP is currently interacting with a broader demand zone near the $1.00 level, coinciding with the lower boundary of a longer-term channel. This zone represents one of the last areas on the higher timeframes where untested demand might still be present. However, the absence of significant absorption thus far suggests that sellers remain in control. Any stabilization at this level would require sustained confirmation over time, rather than a single reactive bounce.

4-Hour Chart: Bearish Trend Intact

A closer look at the 4-hour chart emphasizes the strength of the selling pressure as the price approaches the $1.00 threshold. The recent impulsive move lower was followed by a corrective bounce, pushing the asset towards an internal supply zone around $1.15. These supply zones align with previous consolidation and breakdown areas, indicating potential regions where renewed selling interest may emerge.

Supply Zones and Downside Liquidity

The highlighted supply zones on the 4-hour chart are crucial for understanding potential resistance levels. As long as the price remains below these zones, any upward movements should be viewed as corrective rather than indicative of a trend reversal. Structurally, the market continues to prioritize downside liquidity. Without a clear break in the current sequence of lower highs, the 4-hour trend remains firmly bearish.

Implications for Market Participants

Given the current market structure, institutional investors should exercise caution. The breach of critical support levels and the prevailing bearish momentum suggest that further downside is possible. Monitoring the $1.00 demand zone and the overhead supply zones will be essential for gauging potential entry and exit points. A confirmed break above the supply zones on the 4-hour chart would be necessary to signal a potential shift in trend.

Conclusion

XRP’s recent price action indicates a significant shift towards a liquidity-driven unwind. The breach of key support levels and the strength of the selling pressure suggest that the asset remains vulnerable in the short term. Monitoring the $1.00 demand zone and overhead supply zones will be crucial for assessing potential trading opportunities and managing risk.

Related: XRP Volume Signals Potential Price Drop

Source: Original article