Ripple’s XRP is showing signs of weakness as it continues its downward trajectory, currently trading at $2.15, down 1.20% in the last 24 hours . Technical analysis suggests the cryptocurrency could face a significant decline of nearly 20%, potentially testing the critical $1.76 support level that has held firm for almost six months .
Market Sentiment Turns Bearish
The cryptocurrency market is experiencing uncertainty as Bitcoin consolidates, creating a risk-off environment that’s particularly affecting XRP. This sentiment is reflected in the substantial outflows from XRP investment products, which led altcoin losses with over $28 million withdrawn last week according to CoinShares’ latest report .
Meanwhile, Ethereum has been moving in the opposite direction, leading gains among major cryptocurrencies . This divergence highlights the specific challenges facing XRP rather than an industry-wide trend.
Technical Indicators Point Downward
Several technical factors support the bearish outlook for XRP:
• The cryptocurrency has been unable to break above the $2.70 resistance level for nearly three months
• Key support levels are currently at $2.03 (the 23.6% Fibonacci retracement level) and $1.76
• The Relative Strength Index (RSI) reads 39 and continues to slope downward
• The Moving Average Convergence Divergence (MACD) displays red histogram bars below the neutral line
These indicators collectively suggest that XRP may continue its decline in the coming days, potentially testing the $1.76 support level if selling pressure persists.
Legal Uncertainties Continue
Adding to XRP’s challenges is the ongoing legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). A new filing has emerged in the case, questioning the interpretation of the Howey Test, which is used to determine whether transactions qualify as investment contracts .
This development has prompted comments from pro-crypto attorneys about the uncertainty surrounding the lawsuit’s resolution . The legal ambiguity continues to cast a shadow over XRP’s price performance, despite previous partial victories for Ripple in the case.
What This Means for Investors
For XRP holders and potential investors, the current technical and fundamental outlook suggests caution. The cryptocurrency faces multiple headwinds:
• Continued legal uncertainty from the SEC lawsuit
• Significant outflows from investment products
• Bearish technical indicators on daily charts
• Broader market uncertainty as Bitcoin consolidates
If XRP breaks below the $2.03 support level, the next major support at $1.76 could be tested. Conversely, any bullish reversal would need to overcome resistance at the $2.29 and $2.50 levels (the 38.2% and 50% Fibonacci retracement levels, respectively).
With nine spot XRP ETF applications currently under review by the SEC, some analysts remain optimistic about XRP’s long-term prospects, with targets as high as $5.85 following potential ETF approvals . However, the short-term outlook appears challenging based on current market conditions and technical indicators.
