The ongoing volatility of XRP has once again come to the forefront, as the popular cryptocurrency has slipped below the critical $3 threshold. This latest downturn marks the continuation of a pattern seen since the token’s rally in November 2024, where repeated attempts to maintain prices above the $3 mark have led to subsequent declines and corrections.
On Saturday, XRP’s price made another retreat below this significant support level, coinciding with its 200-hour exponential moving average (EMA), signaling traders to reassess the market conditions. In light of this development, the question arises: how much further could XRP’s price potentially decline in the short term?
Current technical analysis indicates that XRP is reflecting a bearish chart formation that could trigger a price dip of around 15%, pushing the value toward $2.60 in the coming days. Historically in September, the token exhibited a similar price pattern that culminated in a sharp decline after forming a rounded top and transitioning into a period of symmetrical triangle consolidation — a situation that saw XRP prices drop to around $2.70.
This time around, a comparable sequence is being observed in October. On its four-hour price chart, XRP appears to be establishing yet another rounded top, followed by consolidation within a bearish flag formation. Such structures are often precursors to further downward movements, which could reflect the maximum distance between the flag’s upper and lower trendlines.
Adding to the bearish sentiment, the relative strength indicator (RSI) on the four-hour chart has shown signs of correction from previously overbought levels above 70. This implies that there is still potential for further declines before entering oversold territory, thus increasing the likelihood of a price drop.
Should XRP test the support level at $2.93 and fail to maintain its position there, it could confirm a bearish breakdown and pave the way for prices to target the $2.60 mark — a noted decline of nearly 15%. This price target aligns closely with the asset’s 200-day EMA, serving as a crucial indicator for potential market direction.
On the flip side, a bounce back from either the 20-day EMA (at $2.93) or the 50-day EMA (at $2.52) could negate this bearish outlook, allowing for a possible rebound towards the $3 region once more.
Further complicating the scenario is the liquidity dynamics surrounding XRP’s trading activity. According to CoinGlass data, the $3 level is situated between two significant liquidity pockets. On the upside, there are substantial clusters of long liquidations between the $3.18 and $3.40 marks, suggesting that if bulls regain momentum, a surge to trigger stop orders could materialize.
Conversely, the downside liquidity presents an even greater risk, with over $500 million worth of long positions queued up in the $2.89 to $2.73 range. Therefore, if XRP closes decisively below $3, a cascade of liquidations could drive the price down to these lower levels. However, holding above the $3 mark could enable a targeted stop-run towards the $3.20 to $3.40 price range.
As market conditions continue to evolve, traders are advised to closely monitor XRP’s movements and remain alert to the developments that could impact price dynamics. Given the inherent risks involved in trading, thorough research should always accompany any investment decisions.
