The price of Ripple (XRP) is facing a risk of falling to $2, as a classic bearish chart pattern has been confirmed.

Source: Cointelegraph Original: “Ripple (XRP) price faces the risk of dropping to $2, classic bearish chart pattern confirmed”

Key Summary:

XRP may drop to $2 after breaking down from the classic head and shoulders pattern.

The decrease in open XRP futures contracts indicates a weakening of trader confidence.

The XRP price is sending warning signals as bearish technical patterns are confirmed in lower time frames, accompanied by large-scale long liquidations and a decline in open contracts.

Since May 9, the XRP price has formed a head and shoulders (H&S) pattern on its 4-hour chart, indicating a potential downward trend.

The head and shoulders pattern is a classic bearish reversal signal that usually indicates a trend change is imminent. This pattern consists of three peaks: one higher peak (the head) and two lower peaks (the shoulders).

When the price breaks below the neckline (the line connecting the low points of the left shoulder and right shoulder), the pattern is confirmed, releasing a clear sell signal.

In the case of XRP, this pattern was validated during the Asian early trading session on May 19, when the price broke through and closed below the neckline of $2.33.

If the price continues to stay below the neckline, the XRP/USD currency pair may further dip to $2.25 (the current position of the 200-day simple moving average), and then potentially reach the pattern target of $2.00. This would result in a total drop of 14% from the current level.

As reported by Cointelegraph, the price may drop to the level of $2.00 due to weakening bullish momentum.

Analyst Egrag Crypto pointed out that the XRP price “must hold” the support level of $2.30, which aligns with the neckline of the head and shoulders pattern, to avoid a breakdown towards these targets.

The chart shared by the analyst shows that a drop below $2.30 could trigger a massive sell-off, with an initial target around $2.15, and it may even drop to $1.60.

The open interest (OI) of XRP has decreased by 18% over the past five days to $4.49 billion. This significant reduction in open interest indicates a decline in trader confidence and market liquidity, which in turn puts pressure on prices.

The latest pullback in XRP prices has triggered a large number of liquidations in the past day, with long positions worth $12 million being forcibly closed, compared to only $1.4 million in short positions.

This reflects an increased selling pressure in the market, as bullish traders are forced to close their positions at a loss, further driving down prices.

It is noteworthy that while XRP has decreased by 3% in the past 24 hours, the daily trading volume has surged by 70% to $4.1 billion. A spike in trading volume when prices are falling is often interpreted as an increase in bearish momentum, or as market participants adjusting their positions while waiting for XRP’s next move.

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