The recent correction in XRP’s price has raised questions about the sustainability of the current bull market. After testing a multiyear resistance trendline, XRP has experienced an 18.5% drop from its recent high of $0.67 on November 23, prompting concerns of further selloffs in the weeks ahead.
Technical indicators for XRP suggest a prolonged correction, with the cryptocurrency unable to break above a descending trendline resistance dating back to January 2018. This failure to secure a breakout in November 2023 underscores the psychological selling pressure surrounding this critical line.
Historically, each bearish rejection at the descending trendline resistance has led to a decline toward the ascending support trendline. Analysts predict a downside target of around $0.50, aligning closely with XRP’s 50-week and 200-week exponential moving averages (EMAs), implying a potential 20% decline before the end of 2023.
Adding to the bearish outlook is data revealing increased XRP supply in the hands of addresses holding between 1 billion and infinity tokens, potentially indicating a shift of XRP to exchanges for selling. Previous instances show that spikes in this token cohort often precede notable price declines.
Furthermore, institutional investors seem to be derisking their XRP holdings, with outflows worth $2.6 million reported in November according to CoinShares. This contrasts with inflows seen in other cryptocurrencies, with Bitcoin leading the chart at $37,315 during the same period.
Despite the recent decline, some experts view this as a correction within an overall bullish trend. XRP’s remarkable performance in 2023, driven by a partial legal victory against the U.S. Securities and Exchange Commission and the excitement surrounding the spot Bitcoin ETF, has generated an 80% return for investors as of November 23.
Analysts remain optimistic about XRP’s future, anticipating a resumption of its bull trend. While some, like Muro, predict a rise to $0.80, reflecting a 30% increase from current levels, CryptoBull is even more bullish, projecting a target of $4.20 for XRP in 2024. These projections are based on the cryptocurrency’s historical breakout patterns following months of consolidation within triangle formations.
