After a notable upside rally in the past, XRP, the native token of Ripple Labs is poised for price correction as its chart is flashing a sell-off signal. However, this bearish or negative outlook is further getting support from large holders.
Today, December 4, 2024, the blockchain-based transaction tracker Whale Alert made a post on X (previously Twitter) that a crypto whale had dumped a significant 39.99 million of XRP tokens worth $103.18 million. This massive dump was witnessed on Coinbase, the largest cryptocurrency exchange in the United States.
The whale’s significant dump currently aligns with a bearish price action pattern. According to expert technical analysis, XRP has formed a bearish head-and-shoulders pattern on an hourly timeframe.
In trading and investing, this pattern often signals a sell-off and whenever an asset breaches the neckline, a notable price decline is typically observed on the chart.
Experts and analysts currently anticipate similar price momentum in the coming days. If XRP breaches the neckline of this bearish pattern and closes a daily candle below the $2.40 level, there is a strong possibility of a 20% decline, potentially bringing the price down to $2 in the near future.
However, XRP’s Relative Strength Index (RSI) currently stands at 34, which is close to the oversold zone, indicating potential upside momentum. Additionally, XRP is trading above the 200 Exponential Moving Average (EMA) on the daily timeframe, suggesting an uptrend.
This bearish outlook is further supported by on-chain analytics firm Coinglass. Currently, the XRP Long/Short ratio stands at 0.88, indicating strong bearish market sentiment among traders.
Currently, 53.20% of top traders hold short positions, while 46.80% hold long positions.
Combining all these factors, the recent whale activity, bearish price action patterns, and bearish on-chain metrics, it appears that bears are currently dominating the asset in the short term. This suggests a strong possibility that XRP could face a price correction or decline in the coming days.
At press time, XRP is trading near $2.40 and has registered a price decline of 6.5% in the past 24 hours. During the same period, its trading volume dropped by 55%, indicating lower participation from traders and investors amid bearish market sentiment.
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