On March 10, the daily chart for XRP (XRP) marked its lowest closing candle in 99 days. The altcoin fell beneath the $2 support level, but on March 11, it experienced a brief resurgence, recovering 12%.
XRP 1-hour chart.
At higher time frames, XRP must maintain its position above the crucial $2 psychological level, although several indicators suggest a potential deeper decline may be on the horizon.
XRP markets show declining buyer support as futures turn negative
Currently, XRP is down 37.1% from its all-time high of $3.40. When the price dropped by a similar percentage on February 3, spot market bids quickly absorbed the selling pressure, helping XRP rise back above $2.50.
XRP’s spot and perpetual aggregated data.
However, in the last week, XRP’s spot and perpetual markets have shown a bearish trend. Recent data highlights a 50% decline in XRP’s spot cumulative volume delta (CVD) for March.
A negative CVD indicates a higher volume of selling compared to buying. Currently, the CVD stands at -$408 million, signaling diminishing demand and a shift in control to sellers.
Similarly, futures traders have adopted a bearish stance, with the perpetual CVD dropping to -1.18 billion as of March 11. The open interest-weighted funding rate has also turned notably negative, suggesting an increase in short positions in recent days.
XRP funding rate chart.
XRP whales persist in their selling activity
The volume bubble map for XRP indicated a spike in activity toward the end of February. A cryptocurrency analyst noted that this surge coincided with a distribution phase taking place for XRP.
Distribution is a market cycle phase where major investors gradually reduce their holdings to lock in profits, typically occurring near the peak of an upward trend.
Related: What is causing XRP’s price decline today?
Recent data demonstrates that the distribution has accelerated over the past week, with whale outflows, measured as a 30-day moving average, continuously rising.
This suggests that larger holders have been consistently shedding their XRP positions, contributing to the ongoing distribution trend.
XRP total whale flows.
Between March 4 and March 10, significant XRP holders sold approximately $838 million in positions. This substantial sell-off highlights the prevailing bearish trend for XRP.
XRP price head-and-shoulders pattern suggests a $1.60 retest
On March 11, XRP’s 1-day chart closed below $2.05, a crucial neckline for the daily head-and-shoulders formation. This pattern can have significant bearish implications when observed on high time frame charts.
XRP 1-day chart.
If XRP fails to reclaim $2.05 as a support level, lower prices seem likely, as depicted in the chart above.
The immediate target range for XRP’s price lies between the 0.5 and 0.618 Fibonacci retracement lines, often referred to as the “golden zone,” which spans from $1.90 to $1.60. Given the current bearish market conditions, there is a high probability of retesting the 0.618 Fibonacci level or $1.60.
Should this range fail to hold, it could lead to a retest of the long-term demand zone situated between $1.58 and $1.27.
This article does not offer investment advice. Every investment and trading move carries risks, and readers are encouraged to conduct their own research before making decisions.