The XRP price is trading at $0.4931 as of 2:30 am ET, down 3.5% over the last 24 hours. The technical setup and on-chain metrics provide warning signs for bulls to brace for potential price declines in the coming weeks.
XRP Whale Activity
XRP trades in a third bearish session on the daily chart. This price action aligns with the huge inflows of XRP into crypto exchanges, according to data from Whale Alert.
That includes a transfer by Ripple Labs, the company behind XRP, of XRP tokens worth $24.75 million into an unknown wallet on Jan. 30. Many analysts believe that this transfer could be part of Ripple’s routine operations involving the tokens unlocked from escrow each month.
More data from market intelligence firm Santiment shows a substantial decrease in the XRP reserves of whales holding between 100 million and 1 billion tokens, alongside increased holdings by entities possessing over 1 billion tokens, which could be crypto exchanges.
XRP supply distribution. Source: Santiment
This suggests selling by whales, which is a bearish sign.
No spot XRP ETF in the near future
The decline in XRP’s price over the last few weeks followed the discussion around the possibility of a spot XRP exchange-traded fund (ETF) being allowed in the U.S.
Analysts were hoping that the world’s largest asset manager, Blackrock would launch a spot XRP ETF in the near future.
SCOOP: @BlackRock has no plans for a spot $XRP ETF, according to people with direct knowledge of the matter story developing
— Charles Gasparino (@CGasparino) January 18, 2024
These hopes were crushed when the firm clarified that there were no plans to launch such an investment product in the near future.
These developments have dampened these hopes, contributing to the bearish sentiment in the XRP market, causing the price to drop nearly 20% over the last 30 days.
XRP price bear triangle setup
Another indicator hinting at a potential downturn for XRP is a descending triangle pattern.
A descending triangle is a bearish chart pattern used in a downtrend market and formed by a series of lower highs and relatively equal lows, making a support level. The descending triangle is formed from two trendlines, one for high prices and one for lows.
It gets resolved when the price decisively breaks below its support line and falls by as much as the height of the triangle.
On Feb. 1, XRP dropped below the horizontal line of the descending triangle, signalling a potential breakdown. Concurrently, its daily Stochastic RSI stands at around 24, a negative territory indicating the dominance of the bears in the market.
XRP/USD daily chart. Source: TradingView
Therefore, a daily candlestick close below the triangle’s support line at $0.50 risks positioning XRP’s price for a fall toward $0.255 — down about 48% from current price levels.
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