XRP Price Plunges 4% – Is a Rebound or Further Decline Next?

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After attempting to regain bullish momentum in mid-March, XRP has once again signaled a bearish outlook. The large-cap altcoin, which boasts a fully diluted valuation (FDV) of approximately $236 billion, saw a sharp decline of nearly 4% in the past 24 hours. As of Thursday, March 27, during the mid-European session, XRP/USD was trading at $2.36, reflecting heightened volatility in the crypto market.

Mass Liquidations Amplify Downtrend

The recent XRP price drop has resulted in over $10 million in liquidations from leveraged trading positions. Notably, over 97% of these liquidations involved long traders, indicating that bullish investors were caught off guard by the sudden sell-off. This wave of forced liquidations has further intensified downward pressure on the asset.

Whale Investors Remain Silent

One of the primary factors contributing to XRP’s price decline is reduced demand from whale investors. On-chain data from Santiment reveals that XRP holders with balances between 1 million and 10 million coins have been relatively inactive over the past week. These investors currently hold around 5.82 billion XRP, signaling a lack of confidence or a wait-and-see approach amid market uncertainty.

SEC vs. Ripple Case Sparks Sell-the-News Event

The long-standing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has been a significant driver of XRP’s price movements. However, the recent closure of the case has turned into a classic sell-the-news event, as speculative traders rushed to take profits. This has contributed to the ongoing downward momentum, preventing XRP from sustaining its earlier bullish run.

Despite the current bearish sentiment, XRP’s long-term fundamentals remain strong, bolstered by regulatory clarity and institutional adoption of Ripple’s technology. Technical indicators suggest that XRP has potentially formed a reversal pattern, characterized by a head and shoulders (H&S) structure and a declining daily Relative Strength Index (RSI).

Following a critical close below $2.37, XRP is now eyeing the next major support range between $1.90 and $2.00. However, a decisive move above the $2.50 resistance level could trigger a renewed bullish rally, potentially leading to new highs in the coming weeks.

Also Read: XRP Price Target Raised to $8 as Ripple IPO and ETF Hype Build Momentum

While short-term price action remains uncertain, XRP’s long-term outlook is still promising. Investors should closely watch key support and resistance levels as market dynamics continue to unfold.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.