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As XRP slides down over 5%, an analyst has highlighted the next possible targets for the asset, based on this technical analysis (TA) pattern.
XRP May Visit These Levels Of A Parallel Channel Next
In an X post on Sunday, analyst Ali Martinez pointed out how XRP was at risk of observing a further drop if it couldn’t reclaim the $3.3 level. Below was the chart shared by the analyst.
In the graph, Martinez highlighted a Parallel Channel that XRP has followed since late last year. A Parallel Channel is a TA pattern that forms whenever the price of an asset consolidates between two parallel trendlines. The upper line of the channel is likely to be a point of resistance, while the lower one that of support. A breakout of either of these bounds can trigger a continuation of the trend in that direction.
From the chart, it’s visible that the asset slipped below the lower line of the Parallel Channel back in April, but this breakdown lasted only briefly, with the coin swiftly recovering back into the channel. Similarly, the cryptocurrency saw a breakout above the pattern last month, but once again the signal couldn’t sustain as its price returned below the upper line.
Since then, XRP has made a couple of retests of this line situated at $3.3, but each attempt has been rejected. On Sunday, the analyst warned that the coin could face a further drawdown if it failed to recover to this level. Today, Martinez quoted the chart, noting that the asset has just lost another support level: $3. This line is located a quarter of the way down the Parallel Channel.
Now, what could be next for XRP? According to the analyst, the coin may be heading to $2.6, corresponding to the midway line of the channel, or even $2, which represents its lower bound.
These are just the support levels available to the cryptocurrency from a TA perspective. Another major support level could perhaps be hinted at by on-chain data, as Martinez shared in another X post.
In the chart, the data for the recent Cost Basis Distribution of XRP is shown. According to this indicator, investors last accumulated around 1.7 million tokens of the cryptocurrency at the $2.81 level.
Since the spot price is trading above this mark right now, these holders would be sitting on some gain. Generally, if the market mood is bullish, investors in profit react to retests of their cost basis by buying more. This is because they may look at the drawdown as just a ‘dip.’
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The more concentrated a level is with supply, the stronger this reaction is. As such, the $2.81 level with its dense supply could play the role of a major support level for XRP in the event of a retrace to it.
XRP Price
At the time of writing, XRP is trading around $2.99, down over 6% in the last week.
