XRP, the digital asset known for its affinity with various financial institutions, has been navigating tumultuous waters. Currently trading between $1.33 and $1.36, the cryptocurrency has experienced a notable decline of approximately 9% within the past week. This downturn has led to a technical formation known as a bear pennant on the two-day chart, which often foreshadows further price declines.
The bear pennant appears after a steep drop, as seen in XRP’s recent plunge toward the $1.12 range. Following this, the price action has coiled into a tightening triangle below significant moving averages, suggesting that a breakout may be imminent — and not necessarily in a positive direction.
Analysts warn that should XRP break down from this pennant formation, it could potentially plummet towards $0.80, representing a staggering 42% drop from current levels. As highlighted by analyst BitGuru, the key support level is at $1.22. A solid hold here might offer a chance for recovery, but if XRP dips below $1.20, it could confirm a shift toward bearish control.
Whale Activity Heightens Market Concerns
Recent whale activity is contributing to the growing concerns of market sell pressure. On February 21, over 31 million XRP were transferred to Binance, marking the largest single-day inflow to exchanges since January 20. These substantial movements predominantly originated from large holders. Notably, wallets containing over 1 million XRP accounted for 14.5 million tokens sent, while those holding between 100,000 and 1 million XRP contributed another 14.2 million tokens.
This activity has sparked projections of nearly $45 million in sell-side pressure, according to CryptoQuant analyst Darkfost. He cautioned that sustained selling from these large holders could severely restrict XRP’s capacity to rebound in the short term.
As for technical resistance, XRP encounters hurdles at $1.3650 and $1.3750, with a crucial escape point identified at $1.40 to regain short-term bullish momentum. Initial support is observed at $1.3275, where a close below $1.32 might pave the way for further declines toward $1.30 and potentially $1.28.
Mixed Fund Flows Highlight Market Volatility
Despite the downward pressure faced by XRP, it managed to record modest inflows last week, contrasting the overall trend within the broader cryptocurrency market, which saw a significant $288 million in outflows for the fifth consecutive week. Bitcoin, in particular, exhibited heavy outflows, leading the trend with a substantial $215 million exiting the market. Meanwhile, some assets, including XRP, managed to draw fresh capital amidst the chaos.
While American investors withdrew a total of $347 million in crypto, European markets painted a rosier picture, accumulating over $50 million in inflows from countries like Switzerland, Canada, and Germany. XRP’s market capitalization stands resilient above $82 billion, with a circulating supply of 61 billion tokens.
Technical analyst EGRAG CRYPTO is keeping a close watch on the monthly 44 EMA level. A close beneath this key threshold could trigger a liquidity sweep resulting in prices falling into the $0.65 to $0.85 range, unless a rebound occurs, providing a beacon of hope toward a potential rally to $2.20.
As the situation evolves, XRP remains a focal point amid significant market fluctuations. Currently priced around $1.33, the ongoing developments of the bear pennant pattern will demand close attention from traders and investors alike.
