According to Cointelegraph, XRP has experienced a significant rebound, rising over 50% in the past month after hitting a local low of $1.80. This surge is attributed to an improved risk appetite and the anticipation of an 'altseason.' However, recent technical patterns suggest potential short-term downside risks for the cryptocurrency. A double top formation near $2.65 indicates a possible trend reversal, with the pattern comprising two distinct peaks and a neckline around $2.47. Following the second peak, XRP fell below this neckline, confirming a bearish setup. This breakdown suggests a potential decline towards $2.30 if buyers fail to push the price above $2.65, signaling weakening momentum after a robust rally.
XRP has also broken down from a rising wedge pattern, indicating a shift from bullish to bearish momentum. The cryptocurrency is currently testing support from the 50-4H exponential moving average (EMA). A confirmed breakdown below this support could lead to a 20% price drop to approximately $1.94. This target is derived from the height of the rising wedge pattern. The $2.00–$2.04 range is crucial as it holds significant leveraged long positions, which, if forced to close, could trigger a long squeeze, adding selling pressure and pushing the price closer to the $1.94 target.
On-chain metrics, such as the Net Unrealized Profit/Loss (NUPL), indicate that XRP traders are in a 'denial' phase, expecting prices to rise despite fading momentum. Historically, this phase has preceded major corrections, as seen in 2018 and 2021. If history repeats, XRP may face further downside in the short term, aligning with the bearish technical setups of the double top and rising wedge patterns.
Despite these short-term risks, XRP's long-term charts remain bullish. A potential 45% rally towards $3.69 by June is possible if a breakout from a multimonth falling wedge pattern occurs. However, if XRP falls below the wedge's upper trendline and loses support at the 20-day and 50-day EMAs, the bullish outlook could be invalidated, risking a decline towards $1.75. Long-term projections suggest targets of $5.24 and even $17, based on symmetrical triangle patterns and Fibonacci extensions. Overall, while short-term pullback risks exist, XRP's long-term charts indicate a persistent bullish bias, suggesting the rally may not be over.
Catherine