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XRP is poised for potential declines as whale activity and bearish chart patterns raise concerns over its future price trajectory.
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Recent trading analysis indicates that XRP, following a impressive surge, is now at risk of a significant correction as supply pressure mounts.
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According to a COINOTAG source, “The current market sentiment for XRP suggests a strong likelihood of testing lower support levels in the near future.”
XRP faces bearish signals as whale selling and a descending triangle pattern indicate a possible 25% price drop by early 2025.
Bearish Patterns Indicate Trouble Ahead for XRP
XRP’s recent performance has been remarkable, with the price soaring over 300% in just two months; however, current technical indicators suggest that this momentum may wane. The cryptocurrency is now situated within a descending triangle pattern — a bearish setup that often precedes further price declines. The pattern illustrates consistent lower highs and establishes a crucial horizontal support level around $2.10. A breakdown below this mark could trigger significant selling pressure.
A major concern arises as traders monitor the potential downswing. Analysts estimate that if XRP fails to maintain its support, the price could plummet to approximately $1.64 by January 2025, representing a substantial 25% decline from its current trading levels.
The Impact of Whale Distribution on Market Sentiment
Supporting the bearish outlook, on-chain data reveals notable distribution trends among XRP’s largest investors, or whales. Recent metrics show that addresses holding over 1 million XRP tokens have seen a combined reduction of 180 million tokens since December kicked off. A similar trend is observed among entities with approximately 100,000 XRP holdings, which have dropped by 170 million tokens, indicating a clear sentiment shift among large holders.
This selling pressure from wealthy investors creates additional downward force on XRP’s price, further compounded by a notable 26% decline since its local peak at $2.90. As whales liquidate their holdings, the resultant increase in circulating supply diminishes demand dynamic, prompting fears of a price correction.
Exchange Reserve Increases Signal Bearish Momentum
The situation is exacerbated by the rising XRP reserves on exchanges, particularly Binance, the leading cryptocurrency exchange by volume. Since mid-December, XRP holdings on the platform have consistently increased, which has historically preceded price corrections. This influx of tokens into exchange wallets indicates that many investors are capitalizing on recent price highs to secure profits.
The escalating reserves on Binance reinforce the narrative of profit-taking at elevated price points, leading to an expectation of bearish momentum for XRP. Absent any reversal in this trend, further downside risks loom, with potential for a 25% decline as the market grapples with increased supply and ongoing whale selling activities.
Conclusion
In summary, XRP’s technical indicators coupled with significant whale distribution highlight a precarious position for the cryptocurrency in the upcoming months. With critical support levels being tested and increased supply from both large holders and exchanges, a downturn appears imminent. Unless XRP can reclaim previous highs and reverse current trends, traders should brace for a challenging market environment moving into early 2025.
