XRP Price Could Plunge 65%, According to Wyckoff Theory Analysis

The XRP price has suffered a harsh reversal this month, moving into a bear market after falling by almost 30% from its highest level in January.

Ripple (XRP) token crashed to a low of $2.4335 on Wednesday as its daily trading volume and futures open interest tumbled.

According to data from CoinGlass, futures open interest plummeted to $3.45 billion on Wednesday, a stark decline from $7.45 billion seen in January. This dramatic decrease signals a significant drop in investor demand over the previous weeks. Additionally, the daily trading volume for XRP has also fallen drastically, tapering down to $4 billion from over $32 billion just a week ago. Such figures underscore the turbulent landscape within which XRP is currently operating.

Future Catalysts for XRP Price Recovery

Despite the current bearish trend, there are several potential catalysts on the horizon that may push the XRP price higher in the coming months. Notably, Polymarket’s odds of a spot Ripple ETF have skyrocketed to over 80%. This is particularly significant considering that analysts at JPMorgan project spot XRP ETFs could attract over $8 billion in inflows during their first year of existence. By comparison, spot Ethereum ETFs only experienced $3 billion in inflows, making the potential for XRP an exciting prospect within the crypto investment space.

Ripple Labs continues to solidify its position in the financial services sector through strategic partnerships and regulatory approvals. Recently, the company announced a collaboration with Unicambio, a leading currency exchange provider in Portugal. This partnership allows Unicambio to utilize Ripple’s network for currency transactions, exemplifying Ripple’s commitment to fostering innovative financial solutions worldwide.

Additionally, Ripple has secured a money transmitter license in both New York and Texas, enabling it to expand its operations in these crucial U.S. markets. This regulatory advancement is a vital step in bolstering Ripple’s legitimacy and market presence.

Moreover, one of Ripple’s stablecoins, Ripple USD, has gained traction in the market, with daily trading volumes exceeding $200 million, positioning it higher than many of its competitors in the stablecoin sector. Such growth demonstrates consumer confidence in Ripple’s offerings, adding optimism to its future performance.

XRP Price Risks and Market Trends

The landscape for XRP also presents potential risks, particularly through the lens of the Wyckoff Theory—an analysis framework for financial assets that has been around for nearly a century. The theory outlines four phases: accumulation, markup, distribution, and markdown. Currently, XRP appears to be transitioning into a distribution phase characterized by high volatility and investor uncertainty. If the theory holds true, XRP might soon enter a markdown phase, with projections estimating a possible drop back to the support level of $0.9325. This support aligns with the 78.6% Fibonacci retracement point and indicates a significant decline of around 61% from its current price level.

In contrast, the bearish outlook would be considered invalid if XRP manages to rally and surpass its year-to-date high of $3.40, suggesting a shift in market sentiment. To successfully navigate these turbulent waters, investors and stakeholders will need to stay attuned to market indicators and emerging news surrounding Ripple’s strategic initiatives.