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The price of the third largest cryptocurrency right now, XRP, may be poised for a rather painful decline, to say the least. With all the wild price swings of the past few months, what has emerged on the price chart of XRP can be seen as nothing less than a head and shoulders pattern.
For those unfamiliar with the term, this pattern is characterized by three waves of consecutive rallies and declines, with the middle rise and correction being significantly higher than the other two.
Arman ShirinyanAs a result, the price chart is adorned with what look like three hills standing at the "neckline." The neckline serves as an important price support level. If the neckline is breached, the decline can be as large as the second wave of growth. In XRP's reality, this can mean a 24% correction from the neckline level, which is at $2 for the popular cryptocurrency.
So, the bearish head and shoulders scenario for XRP is a drop to as low as $1.50. This is unlikely to happen overnight and is the most grim scenario. If a breakdown does occur, the market will likely first see a retest of the neckline, and if there is no bullish reaction there, then $1.50 will become an almost inevitable target.
Tomiwabold OlajideThere are other scenarios as well. For example, XRP may find support at the neckline, and if the weekly close happens there, bulls' ambitions for the coin will save the bias toward further growth. However, a dip below $1.50 is also in the cards, as it is just the next major support level.
Alex DovbnyaConsidering that XRP has grown over 500% in the last few months, there is plenty of room for a drop. But unfortunately, this will completely erase any hopes of a continued rally for XRP, so better not let the neckline go.
Dan Burgin
Vladislav Sopov