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Highlights
- XRP price faces a potential 26% crash to $1.63 after a breakdown from a bear flag pattern.
- The 90-day MVRV has also surged to an overheated zone that may cause a surge in profit-taking.
- However, the MFI is rising and stands at 56 suggesting that the bear flag breakdown could be a bear trap and a bullish reversal is likely.
XRP price is up by a modest 1% today, June 14, as the volatility that rocked crypto prices on Friday due to the Israel-Iran conflict waned. At press time, XRP trades at $2.16 with $2.3 billion daily trading volumes, signalling high market interest. However, the appearance of a bear flag pattern on the daily timeframe suggests that the price could plunge to $1.60, while a key on-chain metric hints towards the formation of a local top.
XRP Price Outlook as Bear Flag Breakout Signals $1.60 Drop
The daily timeframe chart for XRP price shows a bearish breakdown from a bear flag pattern. By losing support from the lower trendline of the flag’s parallel channel, XRP may now be poised for a steep decline below the psychological support level of $2. The breakdown also signals that the downtrend that commenced in mid-May could continue.
The temporary pause that created the flag’s ascending channel was caused by late buyers who missed the April-May bull run. If demand towards Ripple dries up even with recent developments in the Ripple vs. SEC lawsuit, a downward continuation could commence as bears seek to book profits due to uncertainty.
The breakdown could result in a 26% crash to $1.63 based on the flagpole’s height. Moreover, as XRP price lost the lower trendline support, sell-side volumes spiked to $172 million, the highest since May 30, as sellers flocked to the market.
Meanwhile, the Directional Movement Index (DMI) amplifies the bearish outlook as the -DI oscillates above the +DI. This indicates that the downward price movements are stronger than the upward movements, reinforcing the thesis that Ripple’s price may drop to $1.60.
This bearish outlook aligns with a recent CoinGape analysis noting that on the lower 4-hour timeframe, XRP hints at a drop below $2 as whales also begin to sell.
Conversely, the MFI indicator is rising and stands at 56. This suggests that the flag pattern’s breakdown could be a bear trap, and XRP price could reclaim the lower trendline as support. One of the bullish catalysts that could aid a reversal includes Ripple’s RLUSD growth ahead of the GENIUS Act vote on June 14.
90-day MVRV Signals Local Top
The 90-day Market Value to Realized Value (MVRV) signals that XRP price may have formed a local top. Per Santiment’s data, this metric has surged to 31%, indicating that the traders who purchased in the last 30 days are sitting on profits of 31%.
When many recent buyers are in profit, it increases the likelihood of profit-taking activity. The possibility of this happening is even higher because at its current level, Ripple’s MVRV is in an overheated zone that has preceded a correction. Looking at past trends, each time Ripple’s MVRV reached levels above 15, a bearish reversal ensued shortly after.
In summary, the downside risk towards XRP price has increased as it confirms a bearish breakdown from a bear flag pattern. If a 26% crash ensues as depicted by the flagpole’s height, Ripple could plunge to $1.63. The MVRV ratio, currently at an overheated zone, also supports the likelihood of a bearish reversal as traders become more likely to take profits.
Frequently Asked Questions (FAQs)
1. Can XRP price fall below $2?
2. Which bullish catalysts could aid Ripple’s price reversal?
3. Why is the 90-day MVRV bearish for Ripple’s price?
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