XRP (XRP-USD) Retraces Gains: Is a Major Breakdown Coming?
Ripple’s XRP (XRP-USD) is under severe pressure, falling 12% in 24 hours and reversing its post-rally momentum. After a sharp climb to $3.06717, fueled by Trump’s strategic reserve announcement, the token has pulled back aggressively, testing $2.32. The question now is whether XRP can hold key support at $2.02967 or if a breakdown below $2.00 is imminent.
Despite its previous rally, trading volume has collapsed from $40 billion to just $7.65 billion, signaling waning interest. Open interest has also dropped significantly, reflecting a lack of conviction among XRP buyers. With these critical factors in play, investors are watching closely as Ripple navigates a pivotal moment in its price action.
Key Support Levels to Watch for XRP (XRP-USD)
Technical analysis highlights two crucial support levels for XRP. The first is $2.02967, which currently serves as the lower boundary of the trading range. A break below this level could trigger a steeper decline, targeting the next major support at $1.67220.
Meanwhile, on the weekly timeframe, XRP is still holding above $3.06717, the previous all-time high. If the token can reclaim this level and sustain momentum, a renewed push toward $4.00 could be on the horizon. However, failure to hold above $2.02967 increases the likelihood of a deeper correction toward the 0.382, 0.5, and 0.618 Fibonacci retracement levels, all of which serve as strong support zones.
Bearish RSI Divergence Signals Warning for XRP (XRP-USD)
Momentum indicators paint a bearish picture for XRP. The Relative Strength Index (RSI), which previously sat in overbought territory, has now returned to neutral levels. A move back into overbought conditions could ignite another bullish leg, but for now, the market is lacking buying pressure.
On the daily chart, XRP has formed a strong bearish divergence on the RSI, which is a precursor to potential downside. The trigger for this divergence is a break below $2.02967, a move that has yet to happen but could unfold in the coming sessions.
If XRP breaks below $2.00, the next major downside targets include $1.80, $1.67, and even $1.50, depending on how aggressive sellers become.
XRP’s Declining Volume and Open Interest Spell Trouble
A drastic drop in trading volume is another red flag for XRP holders. Just weeks ago, XRP's volume exceeded $40 billion, reflecting strong investor participation. However, that number has now plunged to $7.65 billion, a sharp decline that suggests weak demand at current price levels.
Similarly, Open Interest (OI)—a key metric for futures contracts—has also decreased, signaling a lack of new buyers entering the market. Rising OI is a sign of bullish conviction, while falling OI means traders are reducing exposure. This indicates that investors are hesitant to take on additional XRP positions, further reinforcing a bearish outlook.
Can XRP (XRP-USD) Rally to $4 or Is More Downside Ahead?
The bullish scenario for XRP relies on buyers stepping in at key support levels. If the token bounces from $2.02967 and holds above $2.32, a move toward $3.30 and $4.00 becomes possible. However, this requires a strong resurgence in volume and renewed investor interest.
On the flip side, if XRP loses support at $2.00, the sell-off could accelerate toward $1.80, $1.67, or even $1.50. The current bearish RSI divergence, falling volume, and declining open interest all point toward potential weakness ahead.
For traders, the next few sessions will be crucial in determining whether XRP can recover or if further downside is inevitable. Will Ripple's XRP rebound, or is a crash below $2.00 the next move?
