XRP is currently showing signs of vulnerability as its recent price action becomes increasingly bearish. After attempting to regain upward momentum above $2.60 in May, the cryptocurrency has struggled to maintain this upward trend, and its price action in recent days has brought it close to losing the $2.10 level.

Notably, the price action has led to the formation of a head and shoulders pattern on the daily candlestick chart. This could be the tipping point causing XRP's price to eventually plummet below $2.

XRP Breaks Neckline of Head and Shoulders

According to a cryptocurrency analyst on social media platform X, XRP has now printed a classic head and shoulders pattern, with a clearly defined symmetry between the left shoulder, head, and right shoulder. The head and shoulders pattern began to form in late April when the price rose to $2.26 to become the left shoulder of the pattern. In early to mid-May, XRP surged above $2.60 to form the head of the pattern, and what appeared at that time was a continuation of strong upward momentum.

The bullish rally lost momentum shortly after peaking in May, and the price started to decline again. By June 3, XRP made another attempt to push the price higher, reaching $2.27 during the formation of the right shoulder. However, this price push was insufficient, and the subsequent price action saw sellers gradually struggle for control.

The head and shoulders pattern, often associated with trend reversals, becomes more concerning as XRP breaks below the neckline at $2.18 and hits a low of $2.07 on July 6. Interestingly, the break below the neckline is accompanied by increased volume, providing further confirmation of the bearish signal.

XRP EMA Rejection: What Happens Next?

Now XRP has broken below the neckline, the range of $2.18 to $2.20 is starting to turn into a solid resistance barrier for any recovery attempts. The daily candlestick chart shows XRP continuing to trade below both the 9-day EMA and the 50-day SMA, currently at $2.1877 and $2.2649 respectively.

Despite a modest recovery in the past 24 hours, XRP has repeatedly failed to surpass the 9-day EMA since the neckline was broken, indicating persistent weakness in the short-term structure.

As long as XRP is stuck below the neckline and the EMA/SMA resistance cluster, the current structure continues to favor a downward extension. Based on the head and shoulders setup, a measured move from the neckline break suggests a decline towards the $1.85 to $1.80 range.

At the time of writing, XRP is currently trading at the neckline resistance level once again at $2.18 after a 2.6% increase in the past 24 hours from $2.13. However, the strength of this recovery remains in question, as it occurs alongside a sharp 48.14% drop in trading volume. The next 24 hours will be crucial, as price behavior around the $2.18 to $2.20 range may determine whether XRP continues to decline and breaks below $2.