The effects of tariffs have led to a risk-off sentiment, putting payments-oriented cryptocurrency XRP near the support zone around $2, which is a vital level for validating a major topping pattern and indicating the start of a renewed downtrend.
This pattern is identified as a head-and-shoulders formation, consisting of three peaks, with the central peak being the highest. A horizontal line drawn from the base of these peaks, known as the neckline, signifies the critical demand zone.
For XRP, the area between $1.90 and $2 has served as that demand zone since January. Thus, if the price dips below this range, it would activate the head-and-shoulders breakdown, signifying a shift from a bullish to a bearish trend.
A potential breakdown could see prices decrease significantly to around $1.07, as noted by a seasoned analyst and trader. Chartists often use the measured move technique, which involves calculating the height from the top of the head to the neckline and deducting that distance from the breakdown point, in this scenario, $2.
On the upside, the $3 mark, which represents the lower high established in early March, remains the key level for bulls to surpass.