The XRP price collapsed hard on Monday as the crypto and stocks meltdown gained steam. Ripple dropped from a high of $3.3970 in January to a low of $1.7753. So, what next for the price of Ripple?
The weekly chart shows that the XRP token peaked at $3.40 earlier this year and then plunged to a low of $1.7753, a 47% drop. This crash coincided with the ongoing crypto crash following Donald Trump’s decision to impose large tariffs on China, Mexico, and Canada.
This crash coincided with that of other assets. Futures tied to the Dow Jones dropped by 640 points, while those linked to the S&P 500 and Nasdaq 100 indices fell by 120 and 570 points, respectively. The Russell 2000 index crashed by over 3.20%.
The daily chart shows that the XRP price peaked at $3.60 in January and then crashed to $1.7753. It plunged below the 50-day moving average, while the MACD and the Relative Strength Index (RSI) have continued moving downwards.
On the positive side, the Ripple price seems to be forming a hammer candlestick pattern, a popular bullish reversal sign. A hammer comprises a small body and a long lower shadow and is one of the most popular reversal signs.
This hammer pattern will be confirmed if the coin ends the day above the $2 support level. If this happens, Ripple will likely rebound strongly and lead to a rally, with the next point to watch being at $3.400, up by 55% from the current level.
On the other hand, a crash below the lower side of the hammer at $1.7750 will invalidate the bullish view and point to further downward movement, potentially to $1.
The ongoing XRP price crash has led to a big increase in bullish liquidations. CoinGlass data shows that over $110 million XRP tokens were liquidated in the last 24 hours, the biggest increase in months. The other big liquidations were Ethereum and Bitcoin, which had over $576 million and $400 million.
Liquidations happen when exchanges close levered positions when losses mount and traders cannot increase their balances.
Still, some positive catalysts will push the XRP price higher in the near term. First, there are signs that the Securities and Exchange Commission (SEC) will approve a spot Ripple ETF later this year. According to JPMorgan estimates, such a fund will likely attract over $8 billion in the first year.
However, such inflows may be an exaggeration since there are signs that investors are only interested in Bitcoin ETFs. These funds have attracted over $40 billion in assets, while spot Ethereum ETFs have struggled to cross the $3 billion mark.
The ongoing growth of the XRP Ledger ecosystem may also benefit the XRP price. For example, the Ripple USD token has become a highly actively traded stablecoin with a volume of over $160 million.
Other networks are entering the XRP Ledger network. The most recent one was Ondo Finance, which now allows institutional investors to mint and redeem the OUSG tokens on the XRP Ledger. XRP Ledger has also had numerous large assets in the ecosystem like Sologenic, Crypto Trading Fund, XRP Army, and Salute.
Further, there is a likelihood that the XRP token will become part of the Strategic Bitcoin Reserves (SBR) since it is a Made in the USA crypto coin. Trump has hinted that these reserves will have more coins, with the other potential ones being Cardano, Solana, and Avalanche.
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