The XRP price has taken a big hit this month. It has dropped nearly 30% from its January peak, entering a bear market. The situation could get worse if the Wyckoff Theory holds true.
XRP’s Sharp Decline
XRP recently crashed to a low of $2.4335. Trading volume has plummeted. Just a week ago, XRP’s daily volume was over $32 billion. Now, it has sunk to $4 billion. Futures open interest has also taken a nosedive, dropping from $7.45 billion in January to just $3.45 billion.
These numbers signal a major decline in investor demand. Many traders are now wondering whether the downward trend will continue.
Wyckoff Theory Hints at Further Losses
The Wyckoff Theory, which has been around for nearly a century, helps explain market movements. It divides price action into four key phases: accumulation, markup, distribution, and markdown.
Between 2022 and November 2024, XRP was in an accumulation phase. During this time, it traded between $0.3260 and $0.9326.
Then came the markup phase in November 2024. Prices surged, and investors rushed in due to FOMO (Fear of Missing Out). Demand exceeded supply, pushing XRP higher.
Now, XRP has entered the distribution phase. Volatility is high. If the theory plays out, the next phase is markdown. This could drag XRP down to $0.9325, a level that aligns with the 78.6% Fibonacci retracement.
Can XRP Avoid the Crash?
Despite the bleak outlook, some factors could push XRP higher. The possibility of a spot XRP ETF has gained momentum. Polymarket’s odds of approval have jumped to over 80%. JPMorgan predicts that XRP ETFs could see $8 billion in inflows within a year. For context, spot Ethereum ETFs have only managed $3 billion so far.
Ripple Labs is also making moves. The company secured a money transmitter license in New York and Texas, expanding its reach. Additionally, its partnership with Unicambio strengthens its presence in currency exchange services.
Another bright spot is Ripple USD, which has seen growing adoption. Its daily volume has surpassed $200 million, outpacing most stablecoins.
Key Levels to Watch
If XRP drops below $2.40, it could trigger more selling pressure. The ultimate support sits at $0.9325, marking a potential 65% decline from current levels.
However, a break above the year-to-date high of $3.40 would invalidate the bearish scenario. If that happens, XRP could regain momentum and push higher.
Final Thoughts
XRP’s future hangs in the balance. The Wyckoff Theory suggests a sharp decline ahead. Yet, positive developments like an XRP ETF and growing adoption could prevent a crash. Traders should keep a close eye on key levels as the battle between bulls and bears unfolds.
