XRP Price Outlook: Bears Target $1.60 as 90-day MVRV Signals Top

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.