Will XRP Price Crash Again?
XRP price has seen a drop of over 17% after hitting a multi-year high of $1.63, now trading around $1.41 as of Nov. 27. Despite this recent dip, XRP has managed to maintain impressive profits, up by almost 180% in its best month since April 2021.
There are some concerns about XRP being overbought, with the relative strength index (RSI) levels consistently above 70 on the daily chart throughout November. Previous data indicates that XRP tends to correct sharply after hitting overbought RSI levels. For example, in June 2023, XRP saw a 46.5% price drop in less than two months after the daily RSI surpassed 85 during a rally to $0.82.
Looking at current price levels and Fibonacci retracement extensions, XRP’s recent breakout passed the 2.618 Fibonacci extension near $1.09, which is now acting as a strong resistance level. This raises the possibility of XRP dropping towards the $1 level by December, aligning with the 1.618 Fibonacci extension.
Interestingly, the recent correction in XRP price coincides with a decrease in the supply held by the wealthiest XRP investors, particularly those with over 100,000 tokens in their possession. This drop in whale holdings may signal a transition from accumulation to distribution phase.
Switching to the weekly chart, XRP appears to be in a long-term uptrend after breaking out of a giant symmetrical triangle pattern. This breakout is reminiscent of a similar pattern that preceded XRP’s massive rally in 2017-2018.
While there are bullish indicators for XRP’s long-term potential, including potential political factors like Donald Trump’s reelection and key partnerships for Ripple, there is also a possibility of a short-term correction given the current RSI levels. It’s essential for investors to conduct their own research and consider the risks involved in any investment decision.
