During the recent downturn in the cryptocurrency market, Ripple[XRP] experienced a decline as well.
Currently, XRP has dropped from $2.61 to as low as $2.21, marking a 15.38% decrease within 24 hours. Moreover, the altcoin has shown a 12.3% decline on weekly charts and a significant 27.8% decrease on monthly charts.
This continuous decline has sparked discussions among analysts about a possible market peak. Notably, Joao Wedson, the founder of Alphractal, has highlighted three indicators that suggest XRP might have reached its peak.
Is XRP at its Peak?
Wedson suggests that XRP may have reached its peak and could potentially drop by over 50% before any further upward movement.
He pointed out three key factors in his analysis indicating a probable peak. Firstly, a substantial number of bullish positions were liquidated, and there is a possibility of more long positions being liquidated in the near future.
Within the last day, approximately $43 million in long positions were liquidated due to the market crash.
Secondly, the buying pressure for XRP has decreased from $5 billion to $1.3 billion. This decrease signifies increased selling activity, with a sell volume of $1.4 billion reported in the last day. Typically, a decline in buying pressure indicates reduced demand for the asset, often preceding price drops.
Lastly, Wedson observed that Binance has been actively encouraging sales recently. As the largest exchange, heightened selling activity from Binance’s traders could worsen price falls, leading to more significant losses.
Therefore, if Alphractal’s observation holds true and this indeed marks the peak, a 50% drop from the current price would bring XRP down to $1.1.
Insights from XRP Charts
Despite the signals pointing towards a potential peak, buyers have not yet lost their confidence in the market. CryptoCrypto noted that XRP’s spot netflow has remained negative over the last four days.
Even with the market decline, the spot netflow decreased to -$16.02 million in the past day. Buyers continue to participate actively, and sellers have not outweighed them yet.
This confidence is particularly strong among whales, as evidenced by the declining Whale to Exchange Flow from 15k to 1k at the moment.
With whales holding their positions and showing no signs of selling, additional catalysts would be needed to drive them out of the market. The presence of active whales may prevent a sharp market decline.
While current market conditions hint at a forthcoming dip, the short-term outlook could vary. Investor confidence remains intact, especially considering that whales are holding their ground, and overall market participants are still actively buying.
In the event of a market peak reversal, XRP would likely breach the $2.0 support level and drop to $1.7. Conversely, if the netflow remains robust, a reversal to $2.3 could be on the horizon.