Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. XRP has found itself back under the microscope as bullish momentum is yet to return with full force. Another weekend is here, and XRP’s price action is still perambulating aroundlast weekend’s flash crash, which saw the cryptocurrency register its biggest liquidation candlestick in history.
Now, XRP is trying to recover to higher price levels above $2. Interestingly, one technical analysis warns that, before any major rebound, the price of XRP could suffer a severe decline,possibly down as much as 40%. While such a drop would be painful for holders, the scenario is being cast not as a permanent collapse but as a capitulation move that might precede a stronger rally. Related Reading Biggest Shiba Inu Burn In Months — And It Came From A Coinbase Account 1 day ago Worst Case Scenario
What transpired last weekend in the crypto markets qualifies as the largest deleveraging event in recent memory. Leveraged positions were forcibly closed out across many exchanges, leading to cascading liquidations that sent price action into a free fall. As such, about $19 billion in positions was wiped outin the span of hours.
In XRP’s case, that intense pressure led to a violent plunge that created a deep low wick to break below $1.6 on its price chart before a quick rebound above $2.2. That wick is central to the argument that the forced selling squeezed both longs and shorts, clearing excess leverage and setting the stage for price discovery to reset. However, a suggestion is that the worst may not yet be fully priced in, and that this purge might continue deeper before sentiment truly turns bullish.
This worst-case scenario outlook is based on an analysisby Steph Is Crypto that envisions another possible 40% crash in the XRP price. As shown in the price chart below, XRP’s price action might fall to revisit last weekend flash crash bottom just above $1.55. XRPUSD currently trading at $2.36. Chart: TradingView
This price level may represent the deepest downside target before the market catches its footing again. If current levels give way, say if XRP loses its more immediate support zones at $2.2 and $2, the descent toward that boundary would amount to a drop of about 30 to 40%.
XRP Price Chart Analysis. Source: Steph Is Crypto on X What’s Next After The Crash?
The wick already formed by the sudden flash crash is interpreted as an initial flush of stops, but the full erosion of weak hands might still have room to run. Only after that purge can a more sustainable rebound be believable. Related Reading Bitcoin Plunges To $105k As Investors Shift To Gold After Crypto Carnage 18 hours ago
If the worst-case scenario plays out, the path forward would require XRP to first establish strong support near or around $1.55, shake off residual volatility, and then gather volume and momentum for the next leg upward. From here, the analyst projected an extended rally that will see th e XRP price break into new all-time highsabove $3.8.
At the time of writing, XRP is trading at $2.35, up by 4% in the past 24 hours.
Featured image from Getty Images, chart from TradingView