Over the last week, the XRP market experienced a predominantly bearish sentiment. During this period, the altcoin experienced a price drop of over 5% as the broader market faced challenges. A broader overview indicates that XRP has consistently traded within a range of $1.29 to $1.55, a pattern that has persisted since February. However, recent technical developments on the daily chart pattern indicate an impending market sell-off to end this month-long consolidation and establish a deeper decline in this bear market. In trading analysis, a symmetrical triangle emerges when the price establishes a sequence of lower highs, marked by a descending resistance line, and higher lows, defined by an ascending support line. These two trendlines converge, creating a triangle formation.
In a recent X post dated May 23, Ali Martinez reports that XRP has successfully broken out of a symmetrical triangle on its daily chart. The altcoin has recently broken through the ascending trend line of this chart pattern, which originated in January. This indicates that XRP has fallen beneath a crucial support level, leaving it vulnerable to further downside targets. According to the seasoned analyst, an acceleration in selling pressure would likely pull XRP down to around $1.14, representing a 16.17% loss from current market prices.
Interestingly, the decline in XRP’s price and its recent bearish signal align with another troubling development. Martinez reports in a separate post that XRP whale activity is currently experiencing a significant decline. In the past nine days, the volume of large transactions, specifically those exceeding $1 million, has seen a significant decline, plummeting from 157 to 67. This marks a staggering 57.3% decrease. The analyst notes that these occurrences typically indicate that whales are retreating as the market transitions into a compression phase, which is anticipated to be characterised by decreasing volatility.
During this time, the current price range establishes an accepted value as the market develops clarity in support and resistance. Furthermore, an increase in limit order activity is anticipated, leading to a deepening of liquidity on both sides, which will ultimately contribute to the formation of a mature order book. However, compressions always lead to expansion, the direction of which depends on liquidity and whether these whales come back as buyers or sellers. At this time, XRP is trading at $1.35, showing a gain of 1.1% over the past 24 hours. Meanwhile, the asset’s daily trading volume has increased by 4.23%, now standing at a valuation of $1.96 billion.