The XRP price has exhibited a seller-dominated market over the past few days, underscoring the continued dominance of the bears in recent weeks. A broader look at the altcoin’s performance shows what looks like a consolidatory range since early February. As this plays out, a market analyst has recently painted a bearish outlook for the XRP price, predicting a potential 30% decline in the near-term.
XRP Breaking Out Of A Symmetrical Triangle
In a recent post on the X platform, crypto analyst Ali Martinez shared a not-so-optimistic outlook for the XRP price. Martinez hypothesizes that the cryptocurrency could soon see a significant downturn of up to 30% in the coming weeks.
This bearish projection is based on the formation of a symmetrical triangle on the 4-hour timeframe of the XRP price chart. For context, a symmetrical triangle is a chart pattern where price forms a series of lower highs and higher lows, with the price narrowing into a triangle shape.
Typically, the price within this triangle compresses and moves towards its apex of the triangle. Eventually, the asset’s price would be forced to either break above the upper boundary of the triangle ( in what is called a breakout) or fall below the triangle’s lower boundary, forming a breakdown.
Sharp Increase In Volatility
When this breakout of the symmetrical triangle occurs, it often leads to a sharp expansion in volatility. This is because market participants expect strong moves in the direction of the breakout or breakdown, hence they increasingly bet in line with the move.
It is, however, worth noting that not all breakouts are “true breakouts.” As such, it is common practice to wait for a confirmation of the breakout or breakdown — the latter in the current scenario — by watching either for a retest of the trendline or for the closure of at least two bearish candles under the lower trendline.
As Martinez highlighted, the XRP price seems to break below the triangle’s lower boundary, implying potential downside volatility in the near term. The price target after the breakdown from the chart pattern is often derived from the height (base) of the triangle.
The crypto analyst calculated a potential 30% downward move from the current price point, putting the target at around $0.93. Nevertheless, it is worth noting that the figures obtained are theoretical and may be subject to change depending on broader contingent market conditions.
XRP Price At A Glance
As of this writing, the price of XRP stands at around $1.34, reflecting a mere 0.6% increase in the last 24 hours.
Featured image from iStock, chart from TradingView
