Yerevan (CoinChapter.com) — Ripple’s native token XRP has been on a bearish descend since April 15. It dropped down to $0.9 before recovering back to $1.19 on Monday, losing 40% of its value over the noted period. The fluctuation indicated a technical setup that risks sending the prices even lower.
XRP is forming a bearish setup known as the Head & Shoulders indicator. It is a chart formation with three peaks above a mutual baseline. The middle peak is the highest and is referred to as the head (H). The other two are the shoulders (S). The H&S setup indicates a bullish to a bearish trend reversal.
The prognosis indicates that traders prefer to sell at the high peak once they consider the currency overbought. This tends to send the price in a descend. In the case of an H&S setup, the price will likely fall below the neckline. Down to the level equal to the distance between the head and the neckline. The bearish trend might mean a possible value of $0.03 for XRP — a 40 percent crash.
What Else Is Affecting XRP?
Ripple, the blockchain company behind XRP, faces a lawsuit from the Securities and Exchange Commission (SEC), filed in December 2020. The US agency has accused Ripple of selling XRP illegally without properly registering it as a security. As the court hearings drag on, Ripple’s wins and losses could affect its token price in either way.
After its latest filing, the SEC is now alleging that Ripple is trying to “harass” the agency and “gamesmanship concerning discovery.” The case is being closely watched as the outcome could have repercussions for dozens of other altcoins.Matt Borelli for CoinChapter.com
On April 23, Ripple’s CEO Brad Garlinghouse came forth with an interview to the ThinkingCrypto channel. He announced that he would not rule out burning XRP coins to cut the supply and maintain XRP’s bullish bias.
According to the technical prediction, whether the XRP price persists on a bullish bias as a result of coin burning or enters a bearish phase is not yet clear.
It all comes down to the behavior of XRP bulls and bears. Should the Head & Shoulders prediction pan out, the bears will definitely gain profit. Chart analysis shows that bears are currently taking ground. It is likely that if the SHS setup pans out and the price will continue to drop.