3 Key Reasons XRP Could Plummet to $1.60 This March

The cryptocurrency market is known for its volatility, and XRP is no exception. Recent trends indicate that XRP might be on the verge of a significant drop, potentially reaching the $1.60 mark by the end of March. In this article, we will explore three critical factors contributing to this bearish outlook.

Declining Spot and Perpetual CVD

One of the primary indicators of XRP’s potential decline is the drop in its cumulative volume delta (CVD) in both spot and perpetual markets. As of March, XRP’s spot CVD has decreased by an alarming 50%, indicating a shift in market dynamics. A negative CVD suggests that selling volume is outpacing buying volume, which is a bearish signal for any asset.

Currently, the CVD value stands at -$408 million, reflecting a significant waning demand for XRP. This trend is further corroborated by data showing that futures traders are also adopting a bearish stance, with the perpetual CVD plummeting to -1.18 billion on March 11. The open interest-weighted metrics have turned notably negative, indicating that more traders are taking short positions in anticipation of further declines.

Whale Selling Activity

Another factor contributing to the bearish sentiment surrounding XRP is the increased selling activity among large investors, commonly referred to as whales. Recent data reveals that between March 4 and March 10, these significant holders offloaded approximately $838 million worth of XRP. This substantial sell-off is indicative of a broader distribution phase, where large investors gradually liquidate their positions to secure profits.

Ki-Young Ju, the founder of CryptoQuant, noted that this uptick in whale activity aligns with an ongoing distribution phase for XRP. This phase typically occurs near the peak of an upward trend, suggesting that large investors are anticipating a downturn. The intensification of whale outflows over the past week further reinforces the bearish outlook for XRP.

Long-Term Bearish Patterns

Technical analysis also points to a long-term bearish pattern for XRP. On March 11, XRP’s 1-day chart closed below the critical neckline of a daily head-and-shoulders pattern at $2.05. This pattern is often associated with strong bearish consequences, especially when observed on a high time frame (HTF) chart.

The immediate target zone for XRP’s price is currently situated between the 0.5 and 0.618 Fibonacci retracement lines, commonly referred to as the “golden zone.” This retest range lies between $1.90 and $1.60, making the likelihood of XRP retesting the 0.618 Fibonacci level or even dropping to $1.60 quite high in the current bearish environment.

Conclusion

In summary, the combination of declining spot and perpetual CVD, increased whale selling, and long-term bearish patterns all point towards a potential drop for XRP to the $1.60 range by the end of March. As always, it is essential for investors to conduct their own research and consider the risks involved in trading cryptocurrencies. This article does not constitute investment advice, and readers should make informed decisions based on their own analysis.