With XRP falling over 5%, an analyst highlighted the next possible target for the asset based on this technical analysis (TA) pattern.
XRP may next visit these levels of the parallel channel.
Analyst Ali Martinez pointed out in a post on X on Sunday that if XRP fails to recover the $3.3 level, it faces the risk of further decline. Here is the chart shared by the analyst.
In the chart, Martinez emphasized the parallel channel that XRP has been following since the end of last year. A parallel channel is a technical analysis pattern that forms whenever an asset's price consolidates between two parallel trend lines. The upper line of the channel may be a resistance level, while the lower line may serve as a support level. A breakout of either of these ranges could trigger a continuation of the trend in that direction.
The chart shows that the asset broke below the lower line of the parallel channel in April, but this downward trend lasted only a short time, after which the currency quickly rebounded back into the channel. Similarly, the cryptocurrency also broke the pattern last month, but this signal failed to hold again, and the price fell back below the upper line.
Since then, XRP has repeatedly retested the $3.3 support line, but each attempt has failed. On Sunday, the analyst warned that if XRP fails to rebound to this level, it could decline further. Today, Martinez referenced a chart indicating that XRP has just lost another support level: $3. This line is located a quarter below the parallel channel.
So, what is the next move for XRP? According to analysts, the currency may rise to $2.6, which corresponds to the midline of the channel, and could even reach $2, representing its lower limit.
These are just the support levels for the cryptocurrency from a technical analysis perspective. As Martinez shared in another X article, on-chain data may hint at another major support level.
The chart shows the recent cost basis distribution data for XRP. According to this indicator, investors have recently accumulated approximately 1.7 million XRP tokens at a price level of $2.81.
Since the spot price is currently above this level, these holders may realize some profits. Generally, if market sentiment is bullish, profit-taking investors may respond to the retest of the cost baseline by buying more. This is because they may view the pullback as a 'dip'.
The more concentrated the supply at a price level, the stronger the reaction. Therefore, if the XRP price pulls back to $2.81, and the supply is dense, this price level could become a major support level for XRP.
XRP Price
At the time of writing, XRP is trading at approximately $2.99, having dropped over 6% last week.
