XRP on Verge of Crucial Test Amid $270 Million Market Sell-off

XRP, the fourth largest cryptocurrency by market capitalization, is approaching a crucial price level deemed important for its price trajectory.

The cryptocurrency market faced additional selling pressure in the early Wednesday session, with numerous cryptocurrencies trading down. Within the last 24 hours, crypto liquidations have reached $270 million, with bullish longs accounting for the majority ($161 million).

At press time, XRP was down 1.61% in the last 24 hours to $2.11 and is down 14% weekly. Currently hovering near the $2 mark, this level could prove decisive for XRP’s short-term price action. A drop below this key level would complete a bearish head and shoulders pattern, potentially leading to further declines.

The market remains cautious, with traders waiting for confirmation of XRP's next move. If XRP fails to sustain support at $2, it might signal a larger fall, with critical support levels expected to appear near $1.80 and $1.60. On the other hand, a strong bounce from this level could rekindle bullish momentum, propelling XRP back toward the resistance at $2.20 and higher.

According to analysts, a decisive close above $3 could invalidate the bearish head and shoulders pattern, offering hope for a recovery. However, as stated earlier, failure to hold above $2 may invite further downside pressure as market uncertainty looms.

There's a twist

XRP remains higher, up 350% from lows of $0.50 in November 2024. The bull run, which peaked at multi-year highs of $3.40 in January, was validated by a symmetrical triangle pattern on the XRP price chart.

According to analysts, XRP has been consolidating within this pattern characterized by two converging trend lines that suggest a buildup of momentum. As it is, XRP’s price action is tightening as it approaches the apex of the triangle. This setup, commonly seen on cryptocurrency markets, often precedes a sharp move, either upward or downward, depending on the direction of the breakout.

On the upside, the $2.39 level, which coincides with the daily SMA 50, remains a key level for XRP to reclaim to target $3 once again. On the other hand, the support range near $2 might be tested if the drop continues.