XRP, the digital asset recognized by its ticker XRP, has encountered a renewed decline, sliding 2% in value over the last 24 hours. This move has raised concerns as recent market signals echo the setup witnessed in February 2022, which preceded a dramatic downturn in XRP's price by roughly 60%.
A detailed analysis reveals that the market dynamics currently unfolding replicate a specific pattern originally identified by blockchain analytics firm Glassnode. This pattern highlights an imbalance between different cohorts of investors based on their purchase timelines. Specifically, data indicate that those acquiring XRP within the last week to one month have entry price points below those who bought between six and twelve months prior. This inversion creates psychological pressure on longer-held positions that are now underwater, often leading to increased sell-offs as these holders attempt to minimize losses.
In the 2022 instance, XRP hovered around the $0.80 mark before succumbing to a 60% decline, falling near $0.30 amid wider market turbulence. While the current price sits at a much higher nominal level, the underlying on-chain behavior mirrors this past deterioration, signaling potential risks for the token's value.
Chart patterns bolster this narrative, illustrating repeated failed rallies and weakening technical structures. The $2 price threshold emerges as a significant resistance and support zone. Historical data show that testing this level has resulted in weekly realized losses between $500 million and $1.2 billion, indicating a concentrated group of holders with cost bases around this price. Should XRP breach this barrier downward, these holders will face critical decisions regarding whether to cut losses or hold, potentially exacerbating volatility.
Technically, XRP ascended from $1.72 in December to peak at $2.44 by mid-January, only to relinquish most of these gains swiftly. Currently, the asset is trading beneath all major moving averages: the 20-day at approximately $2.04, the 50-day at $2.06, the 100-day at $2.19, and the 200-day at $2.31. Additionally, a descending trendline originating from July's $3.66 high imposes resistance near the $2.6 to $2.7 range, continuing to cap potential upward momentum.
Volume patterns indicate heavy trading activity between $3.00 and $3.60, a region reflecting trapped buyers who may be inclined to sell upon rallies reaching these levels, adding further resistance pressure.
Despite net inflows totaling around $13.09 million as of January 20th, XRP's price declined by 2.5%, evidencing that selling pressure currently exceeds buying demand. This dynamic underscores supply dominance over demand and suggests limited upward price movement in the near term. The token has been confined to a range between $1.80 and $2.40 for several weeks, with transient inflow spikes failing to propel it beyond resistance.
Looking ahead, several price levels serve as critical junctures for XRP's direction:
- Support levels:
The $1.80 to $1.90 zone has been extensively tested and serves as vital support. Holding here preserves the current trading range.
Should the price fall below this, the next significant support lies at $1.72, which represents the December low.
A further drop to around $1.60 or below would constitute a severe breakdown, potentially signalling deeper declines. - Resistance levels:
The initial resistance comes at the 20-day moving average near $2.04.
Stronger resistance lies between $2.06 and $2.19, anchored by the 50-day and 100-day averages.
Surpassing $2.72 would mark a breakout point, opening a pathway toward levels exceeding $3.
In summary, XRP's immediate outlook hinges on its ability to maintain support above $1.80 and reclaim prices above $2. Without these key technical validations, the token risks renewed downward pressure with increasing realization losses among investors.