XRP (XRP) has risked further downside from $1 as its bearish technical setup combined with increased inflows into exchanges.
Key considerations:
XRP faces additional resistance at $1.42
XRP’s 13% rally to $1.43 between Saturday and Sunday hit the resistance wall at $1.39-$1.43, causing it to return to its current price of $1.34.
A heat map of the cost distribution shows that there is a large supply cluster in this area, where approximately 1.48 billion XRP have been mined over the past 30 days. This indicates a strong resistance area for XRP that limits the upside potential.
The daily XRP price chart below shows that this area is aligned with the upper trend line of the symmetrical triangle that has been holding down the price since February 1st.
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The XRP/USD pair is trading below the downward trend line of the triangle at $1.35. A daily candle below this level confirms a symmetrical triangle and clears the way for a deeper correction.
The preferred chart pattern size target, calculated by adding the height of the triangle to the breakout point, is $0.95, which is about 29% below current levels.
As Cointelegraph reported, a break and close below the lower boundary of the $1.20 falling channel puts the February 6 low of $1.11 at risk of breaking. After that, XRP may fall to psychological support at $1.
Commenting on the support level at $1.20-$1.22, BitGuru analyst said:
“If this base holds and buyers come in, a return to $1.80-$2.20 could happen quickly, signaling the start of a recovery move.”
Meanwhile, the two-day chart is also down to $0.80, boosted by shark selling.
The supply of XRP on exchanges is increasing
According to data source CryptoQuant, more than 472 million XRP, worth about $652 million, were transferred to Binance over the past week, the largest inflow to the exchange in February.
The transfer of tokens to exchanges often indicates a possible readiness to sell or at least place liquidity in the market.
“Such inflows typically reflect the defensive position of investors holding XRP,” CryptoQuant analyst Darkfost said in a QuickTake note on Monday.
“When the volume of such flows is recorded, they can create the conditions for a sudden wave of selling pressure, capable of influencing prices in the short term.”
As a result, the XRP balance on Binance increased from 2.55 billion in mid-February to 2.73 billion tokens. This represents a total increase of nearly 180 million (+7%) in less than three weeks.
An increase in the supply of XRP on exchanges is a classic bearish signal that could outweigh demand and increase selling pressure.
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