XRP's price has declined sharply due to massive liquidations and profit-taking following November's rally. The token faces bearish sentiment in derivatives markets, while Bitcoin and Ethereum attract more investor attention.
On Monday, December 9, 2024, the price of XRP, the token used by Ripple, dropped by 9%, hitting intraday lows of $2.36. While XRP/USDT on Binance remains near all-time highs, today's decline marks the steepest drop in over two months.
Why Is XRP Price Down Today? Market Dynamics and Price Action
The cryptocurrency market is witnessing a notable divergence as XRP experiences significant selling pressure. According to CoinMarketCap, XRP is among the leading decliners during Monday's session, with its market capitalization shrinking to just under $136 billion.
Consequently, XRP has once again fallen below Tether (USDT) on the list of largest tokens. This selling pressure is occurring amid increased trading activity, with a 24-hour volume of $12 billion.
Total long liquidations amounting to $358 million in the last 24 hours have amplified the price drop, creating a cascade effect in the market. For XRP alone, leveraged long position liquidations are currently the fifth largest in the market, totaling $14.5 million, according to Coinglass data.
Why is #XRP down $.13? pic.twitter.com/ftjG1szV7T
— House of XRP (@genelambo) December 9, 2024
XRP Technical Analysis and Market Metrics
The current market structure presents concerning signals for XRP holders. On the intraday hourly chart, XRP's price has dropped below short-term support around $2.4597, breaking through the trendline drawn from local lows at $2.0275. This move suggests the potential for further short-term depreciation toward the mentioned support levels or the trendline extending from the late-November lows.
Short-Term Support and Resistance Levels (H1 Chart)
Support Zones:
- $1.5971: The peak from November 24.
- $1.9951: Local highs from late November to early December.
- $2.2075: The trendline coinciding with early December lows.
Resistance Zones:
- Trendline originating from December 5.
- $2.4957: A zone defined by early December highs.
- $2.7897: Local highs from December.
- $2.8681: Another set of local highs from December.
On the daily chart (D1), the long-term outlook for XRP remains bullish, with a projected rise toward the $5 mark. This optimistic forecast is based on a technical pattern evident on the chart. A “pole” formed throughout November, followed by the current correction resembling a “flag.” A breakout above this flag pattern could result in a measured target nearly double the current price levels.
At the same time, XRP is holding support at the 23.6% Fibonacci retracement level, near $2.33, which could provide a foundation for potential recovery if buying pressure increases.
Some of the forecasts are even more ultra-bullish:
However, in the short term, the funding rate has turned negative at -0.0885%, suggesting strong bearish sentiment in derivatives markets. Open interest has declined by 4.25%, reflecting diminishing trader confidence.
Fundamental Factors for XRP Price
Bitcoin's Dominance
Bitcoin's historic breakthrough to $100,000 has redirected market focus and capital flows. While BTC’s November rally provided support for XRP, investor focus has now shifted back to the leading cryptocurrency. This shift has led to increased capital inflows into BTC, resulting in a relative decline in demand foraltcoins like XRP.
Regulatory Environment
Despite Trump's nomination of a pro-crypto SEC chair candidate, ongoing regulatory uncertainties continue to impact XRP's market performance. The previous legal battles have left a lasting impact on investor sentiment.
Historical Context and Price Patterns
Before this decline, XRP had experienced remarkable growth, reaching $2.90 in early December 2024. This surge represented a 375% increase over 30 days, potentially setting up conditions for the current correction.
XRP Price Prediction, FAQ Section
Why is XRP falling?
XRP is falling due to a combination of factors, including profit-taking after November's rally, bearish sentiment in derivatives markets, and broader market liquidations. Over $14.5 million in leveraged long XRP positions were liquidated in the last 24 hours, amplifying the downward pressure. Additionally, market attention has shifted toward Bitcoin following its historic surge to $100,000, diverting capital flows away from altcoins like XRP.
Will XRP ever go up in price?
Despite the current decline, XRP's long-term outlook remains bullish based on technical patterns such as the flag formation on the daily chart. If the price breaks out above the current correction zone, it could target levels near $5. However, this is contingent on increased buying pressure and improved market sentiment.
How low can the XRP price fall?
In the short term, XRP could test lower support levels around $2.2075 or $1.9951, as suggested by the intraday chart. A breach of these levels might push the price toward $1.5971, the peak from late November. The price could also revisit the 23.6% Fibonacci retracement level at $2.33 if selling pressure persists.
Is XRP worth holding?
XRP remains a speculative asset with both high risks and high rewards. Its long-term bullish potential, as indicated by technical analysis, may appeal to investors with a higher risk tolerance. However, ongoing regulatory uncertainties and market volatility require careful consideration. Holding XRP should align with an investor's broader strategy and risk appetite.
This article was written by Damian Chmiel at www.financemagnates.com.
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