XRP’s price trajectory has taken a downturn in response to a recent market sell-off, reflecting broader risk-off sentiment in the cryptocurrency landscape. The altcoin is currently trading at $2.78, representing a 1.78% decrease over the past 24 hours. This decline is compounded by a noticeable drop in on-chain activity, suggesting that XRP could remain under pressure in the weeks to come unless crucial support levels are maintained.
The Crypto Fear & Greed Index has shifted into the “fear” zone, now at 46, dipping from neutral levels just a week ago. This change indicates a growing caution among investors, as reported by Alternative.me. The decline in confidence is mirrored in diminished on-chain activity, with active addresses on the XRP Ledger dropping to approximately 19,250 on Monday from a high of around 50,000 in mid-July. This reduction in active wallets is a significant bearish signal, reflecting a lowered risk appetite among XRP traders and increasing sell pressure.
Further illustrating the weakening investor sentiment, the futures open interest for XRP has plummeted to $7.7 billion from $10.94 billion during the same period. This drop suggests a lack of conviction among traders, lending credence to the possibility of continued downward momentum for the altcoin.
Despite these challenging fundamentals, technical indicators point toward a potential rebound if XRP can hold its support level at $2.70. The current chart pattern depicts a descending triangle formation, a typically bearish reversal indicator that has emerged following the July rally to a multi-year high of $3.66. The bulls face a crucial battle at this support level; maintaining it could provide a pathway for the price to rally toward the upper resistance line at $3.09, which aligns with the 50-day simple moving average (SMA) and the 0.618 Fibonacci retracement level.
However, if XRP fails to hold above $2.70, it may trigger a further sell-off, with the next line of defense situated within a demand zone between $2.60 (the 100-day SMA) and $2.48 (the 200-day SMA). A breakdown could lead to a target price around $2.08, marking a potential 25% decline from current levels.
Market analysts also note that XRP’s Moving Average Convergence Divergence (MACD) suggests an impending bearish crossover, raising concerns that the price could drop to $2.17 in the near future. In terms of market dynamics, a liquidation heatmap indicates that buyers may step in around the $2.70 mark, while larger clusters of sell orders are present between $2.87 and $3.74.
As market conditions continue to evolve, investors are advised to closely monitor these indicators and support levels, as any investment in cryptocurrencies carries inherent risks. It is crucial for traders to conduct thorough research prior to making investment decisions.
