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Three Reasons: Why the XRP price could fall by 25 to 30 percent in March

  


XRP price could fall by over 25 percent in the coming weeks. This is due to a multi-month bearish setup and concerns over excessive XRP supply.


XRP falling triangle

XRP has been consolidating within a descending triangle pattern since hitting its second-highest level ever at $1.98 in April 2021.


In doing so, the XRP/USD pair has made a series of lower highs on its upper trendline while finding solid support at $0.55, as seen in the chart below.



In the week ending March 13, XRP price retested resistance at the upper trendline of the triangle . This raised concerns that the coin could see another decline towards the trendline support at around 0.55. That would be a drop of between 25 percent and 30 percent.


This bearish view is bolstered by more bearish catalysts forming around the triangle resistance. 


A bearish hammer formed on the XRP chart on March 12th. This is a candlestick pattern with a small body and a long wick to the top. That signals less buying pressure near the week's high so far at around $0.85.


Also, the price turned down after testing the resistances at the 20-week EMA (green wave) and the 50-week EMA (red wave). This was particularly difficult because they also converged, as can be seen in the picture below.


There were also other negative signals for XRP. Ripple Labs recently locked 800 million XRP in escrow as part of its programmed payout schedule .


The blockchain payments company transferred around 100 million XRP worth nearly $40 million to exchange wallets on March 3. Meanwhile, the remaining 700 million XRP (worth around $550 million) are held in escrow. At least 200 million XRP is expected to flow into the market to fund Ripple's operating costs and to distribute XRP to Ripple customers worldwide.


Meanwhile, the remaining 700 million XRP (worth around $550 million) are held in escrow. At least 200 million XRP is expected to flow into the market to fund Ripple's operating costs and to distribute XRP to Ripple customers worldwide.



Fears of a sell-off stem from XRP price's previous reactions to unexpected increases in supply. For example, XRP/USD fell over 50 percent to nearly $0.60 in just two days four months after surging in net supply from $40.46 billion to over $47 billion.


However, Ripple's payout of 800 million XRP has not yet translated into net circulating supply.


Profit-taking risk increases

Yet another catalyst signaling that XRP price could fall by 25 percent to 30 percent is an indicator from Santiment, which tracks social media trends and their impact on market trends.


According to Santiment, the XRP price rose by over 15 percent as of March 12. At the same time, there was a sharp increase in social media searches for the hashtag #XRPNetwork. This suggests that a possible sell-off could be imminent. Excerpts:


"Historically, our social trends have shown that when people are making #XRPNetwork a hot topic, it's a good moment to take profit."

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