**Key Takeaways**
The $2.7 area on the XRP price chart has proven to be a significant level, acting as a key support since August. Analysis revealed a build-up of short liquidation levels around this zone, suggesting that XRP could retest this area before making its next bearish move.
**What Would Convince Swing Traders to Lean Bullishly?**
If XRP manages to reclaim the $2.8 area as a demand zone, it would signal to swing traders that buyers are strong enough to attempt a recovery past the $3 mark. This shift would provide optimism for a potential bullish trend.
At the time of writing, Ripple (XRP) was trading around $2.42, indicating short-term bearish momentum. Sellers currently hold the upper hand and might push the price toward the psychological support at $2.
**Technical Analysis: Potential for a 22% Price Drop**
On the weekly timeframe, key swing points have been identified at $0.486 and $3.4, with a notable rally from $1.61 to $3.66 that began in April. This long-term price movement confirms a bullish weekly structure for XRP. However, a move below $1.6 would be necessary to shift the overall swing structure to bearish.
The daily chart tells a different story with a bearish internal structure. Local highs and lows, marked at $3.1 and $2.7 respectively, frame this bearish bias. Although the swing structure remains bullish due to a prior rally from $1.9 to $3.66 during June and July, recent price action suggests sellers have gained momentum.
XRP bulls had previously defended the $2.7-$2.8 demand zone against bearish retests since July. However, increasing selling pressure recently broke this support, leaving a large imbalance between $2.5 and $2.77. This zone now represents a significant obstacle for buyers attempting a rebound.
Further technical indicators show bearish signals: Moving Averages and the Awesome Oscillator both support a negative outlook. The Chaikin Money Flow (CMF) has climbed slightly to +0.05, indicating some buying pressure, but this is likely insufficient to push prices back above $2.8.
Given the current bearish structure, XRP could see a drop to the $1.9 and $1.6 support levels. A daily close below $2.28 would increase the likelihood of a roughly 22% price decline.
**Impact of Liquidation Levels and External Factors**
The short liquidation cluster around $2.67 adds further importance to the imbalance under the $2.8 area. This “magnetic” zone is expected to draw XRP down to $2.7 in the near term. However, given the $2.7 supply zone and bearish internal structure, any bounce off this level may trigger another downward price move.
It is also important to consider the influence of Bitcoin (BTC) on XRP’s price trends. A strong Bitcoin rally beyond $117,000 would indicate broader bullish strength in the crypto market. Such a development could help XRP traders anticipate a recovery above $3.1.
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**Summary:** XRP faces short-term bearish pressure after breaking key support at $2.7-$2.8, with technical indicators pointing toward a possible 22% decline. However, reclaiming and defending the $2.8 demand zone, along with favorable Bitcoin price action, could shift momentum back to the bulls. Traders should watch closely for price behavior around the $2.28 daily close and the Bitcoin market dynamics.
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