XRP (XRP) charts this month are depicting multiple bearish patterns with the aim of falling below $1.
Key conclusions:
- XRP is forming head and shoulders and bear flag setups on its shorter time frame chart.
- Metrics in the chain further signal weak demand or a sense of capitulation among retailers.
A head and shoulders setup indicates a 10% drop in XRP.
Since June 5, XRP price has formed what appears to be a Head and Shoulders (H&S) pattern.
A setup develops when price forms three peaks at the top of a common neckline support, where the middle peak, called the “head,” is higher than the other two, the “shoulders.”
The H&S pattern is usually resolved when the price decisively breaks below the neckline support, where its target side is measured by subtracting the breakout level from the maximum height of the structure.
XRP/USD four hour price chart. Source: TradingView
Since Thursday, XRP has formed the right shoulder of the pattern, seeing an initial decline towards the neckline near $1.09.
Applying the technical rule, the target for June is around $0.99, a downside of roughly 10%, if the price breaks below the neckline.
In contrast, a clear break above the top of the right shoulder at around $1.12, a level that also aligns with the 20-period exponential moving average (20-period EMA, green) on the four-hour chart, may invalidate the H&S pattern.
In this case, XRP could recover towards the 50-period EMA (red) near $1.15, which is 4.5% higher than the current price levels.
Another bearish setup points to a lower price target for XRP
XRP’s four-hour chart is also showing a bearish flag, adding weight to the bearish outlook below $1.
A bearish flag is formed when price consolidates within a rising channel after a sharp selloff. It usually signals a pause before the previous downtrend resumes.
XRP/USD four hour chart. Source: TradingView
As of Thursday, XRP tested the lower flag trend line near $1.10. A decisive four-hour close below this level could confirm a breakdown.
Applying the technical rule, XRP’s bearish flag target is near $0.94, roughly 15% below current prices.
The Relative Strength Index (RSI) near 43 supports the bearish view, showing weak momentum below the neutral 50 level.
However, a jump above $1.12 would weaken the setup. A stronger move above the 50-period EMA near $1.15 could delay the sell-off and send XRP towards the upper flag trendline near $1.18 – $1.20.
On-chain data shows a decline towards $0.96
The MVRV XRP price ranges suggest that the price still has room to fall towards the lower green zone.
XRP MVRV price range of extreme deviations. Source: Glassnode
For new traders, MVRV compares the market price of XRP to the average price at which the coins last moved on-chain. In simple terms, it shows whether the owners have large paper profits or losses.
When the price is trading near the upper limits, the market is usually overheated. When it falls towards the lower bands, it often signals stress, weak demand or capitulation.
Related: XRP transaction demand drops 91.5% as traders focus on $0.65 support
That lower green band has acted as a bear market magnet for XRP in previous cycles. It fell towards or below the same zone during the major declines of 2018, 2020 and 2022 before later finding stronger support.
The next major downside target is located near the lower green band near $0.96, about 13% below current prices if history repeats itself.
