A market analyst has spotlighted two moving average trends that could spell trouble for XRP but identifies a silver lining.
Notably, this warning came from “Steph is Crypto,” a well-known market commentator, amid the ongoing downtrend that has impacted both XRP and the broader crypto market. For context, XRP has collapsed by more than 14% over the past week, changing hands at $2.14, a 41.3% drop from the yearly peak of $3.65 in July.
Despite weeks of bearish price action, Steph found that steeper declines may still be on the horizon. Specifically, the market analyst called attention to a bearish price action surrounding XRP’s 50-week simple moving average (SMA), with historical trends suggesting further downside could still play out.
Weekly Close Below 50W SMA
Notably, when XRP closes a weekly candle below the 50-week SMA, what often follows is a steeper decline. This trend has played out multiple times over the past seven years, but Steph only spotlighted two major cases.
The first case on his chart occurred amid the correction from the $3.31 peak in early 2018. During this correction, XRP closed a weekly candle below the 50W SMA in June 2018. What followed was a crash that pushed prices from $0.58 to $0.245, representing a 57.7% decline within ten weeks.
XRP 1W Chart Steph is Crypto
Steph’s chart also identifies another occurrence in early 2022. Specifically, XRP closed its first week of the year at $0.85, below the 50W SMA at $0.89. The downturn that emerged pushed prices from $0.85 to $0.28 by June 2022, a 74% crash.
XRP Observes Another Bearish Close
Now, the XRP price has witnessed another weekly close below the 50W SMA on the back of the ongoing market collapse. Specifically, two weeks back, XRP closed at $2.36, below the pivotal moving average at $2.54. “This looks very dangerous for XRP,” Steph said.
Since this bearish close, XRP has dropped about 9% to the current price of $2.14. If XRP mirrors the historical trend, even the lower drop of 57.7% would push prices to $0.998 or roughly $1. Meanwhile, if XRP replicates the steeper 74% decline, its price could slump to around $0.61, the level it traded for before the November 2024 upsurge.
However, with spot ETFs emerging, recent Ripple partnerships, legal clarity, and treasury firms, a 74% drop for XRP remains unlikely at this point. Interestingly, Steph also highlighted a silver lining in a separate report surrounding another bearish trend on the daily chart.
A Silver Lining
Notably, he pointed out that XRP had witnessed a death cross on the daily timeframe. For context, this death cross, which occurs when the 50-day MA falls below the 200-day MA, emerged on Nov. 9. Since then, XRP has dropped 6%, and historical trends also suggest sharper declines may materialize.
XRP Death Cross
Nonetheless, Steph found that the declines that occur following the death cross often point to the market bottom, leading to a subsequent explosion.This pattern played out in 2017 and 2020. In each case, XRP’s price explosion occurred shortly after the drop that came from the death cross.
Interestingly, market watcher Cryptollica believes XRP could drop further to retest $1.95, but he expects a recovery run to a new ATH at $10.
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