The price of XRP is facing a bearish head and shoulders that is spending 18% below $1. However, the exchange rate has risen more than 300% since mid-May. In addition, the open interest rate has decreased, and the long term strength has decreased in several weeks.
More buying momentum may keep XRP stable for the time being, but a move below the neckline will confirm the downside.
Bearish Head and Shoulders Risks Down 18%.
12 hour chart of XRP paints a bearish head and shoulders. The left shoulder formed at the beginning of March, followed by a peak in the middle of March. The right shoulder was completed in May, mirroring the left shoulder plan.
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The neckline is around $1.18, with a bearish pattern resting below the neckline of XRP. XRP dropped to $1.30 on May 23 before quickly rebounding. The risk remains alive until XRP recovers levels above the right shoulder and head.
The measured movement from the neckline projects a drop of about 18% in the price of XRP. But will the breakup happen? On-chain and derivative data tell a different story.
Buying Pressure Quadruples As Exchange Output Rises 300%
The bearish XRP image hard faces on the pushback chain. Glassnode’s Exchange Net Position Change metric, which tracks the movement of exchanges, shows XRP flows increasing since mid-May.
On May 15, the metric read -7,144,942 XRP. By May 24, the reading had dropped to -29,372,431 XRP. This represents a 300%+ increase in the nine-day flow.
Net exchange outflows signal accumulation off-exchange. The money that comes out reduces what is sold immediately, and reduces the pressure. The trend has been steady rather than spiky, pointing to a deliberate buying campaign.
Whether this buying pressure can save the price of XRP from falling below $1 depends on its persistence. A steady flow can absorb the factors that are driving the disruption, making the setup a battle royale. Derivatives data add weight to this counter-argument.
Longer Loses as XRP Price Faces Stalemate
Derivatives data reinforces the idea of having different types. Santiment data shows that XRP’s open interest has decreased from $1 billion to $914.19 million as of May 15. Total interest in long positions also decreased from 0.008% to 0.003%.
A 62% drop in long-term currency rates reduces the risk of long-term defaults. A long-term decrease means that a small amount of low-fat oil has been wasted. Coupled with the pressure to buy, negative emotions are debilitating.
XRP trading at $ 1.35 on May 25 and the chart is still in a bearish setup. A move below $1.34 followed by $1.28 increases downside risk. The biggest weakness comes out below the $1.21 and $1.18 levels.
A 12-hour close below $1.18 would push the price of XRP to $1.01 or even $0.96. This indicates a fall of $1 and confirms the break of the head and shoulders. The 1.618 Fibonacci level at $1.01 acts as a major target.
A retracement above $1.55 weakens the bearish bias and opens the way back to $1.60. A 12-hour close above $1.60 blocks the head and shoulders.
XRP price is at a crossroads where on-charts bearishness meets on-chain bullishness. The data points to a relatively stable period for the time being. A steady decline of $1 requires buying pressure to disappear and long-term returns.
A note XRP Exchange Outflows Rise 300%. Is It Enough to Keep a Chart? appeared for the first time BeInCrypto.
