Ripple’s XRP is currently navigating through a challenging phase, with technical analysis pointing toward a possible 13% decline if the cryptocurrency fails to reclaim critical support levels. Following a breakdown from an ascending triangle pattern, XRP has seen its price drop below the key $2.50 support level, leading many traders to brace for more volatility.

Technical Breakdown and Bearish Outlook

XRP’s recent price action shows a clear shift in market sentiment. The cryptocurrency’s failure to hold the $2.50 support has triggered a bearish trend, which has intensified in the last 24 hours. At press time, XRP was trading around $2.45, marking a 5% decline from the previous day. The asset’s breach of the ascending triangle pattern, combined with the failure to maintain horizontal support, raises the possibility of a further downward move.

Technical indicators suggest that if XRP fails to reclaim the $2.50 level and closes a four-hour candle below it, the cryptocurrency could face a significant drop to the $2.10 range in the coming days. The potential 13% decline would indicate a shift from the recent upward momentum to a full-fledged downtrend.

Increased Trading Volume Signals Heightened Market Activity

Despite the bearish outlook, XRP has experienced a noticeable surge in trading volume, up by 70% in the last 24 hours. While this spike might seem like a positive sign, increased trading volume can indicate both bullish and bearish activity, including liquidation of positions, token accumulation, or further dumping. This suggests that XRP’s market is currently volatile, with a mixture of buying and selling pressures influencing its price.

Mixed Market Sentiment and Accumulation

On-chain data shows a divided sentiment among investors. Some long-term holders appear to be accumulating XRP, as indicated by the recent influx of funds into the market. However, this accumulation might not be enough to push XRP into a strong rally in the short term.

Over the last 24 hours, XRP experienced an outflow of more than $13.65 million worth of tokens, which suggests that despite the accumulation, there is a lack of sufficient buying momentum to counter the bearish pressure.

Over-leveraged Positions Heighten Risk of Liquidations

One of the key concerns for XRP traders is the over-leveraged positions in the market. Current liquidation levels are concentrated around the $2.40 and $2.55 price points. If XRP’s price drops below the $2.40 level, a massive $35.5 million worth of long positions could be liquidated, further adding to the downward pressure. Conversely, if the price manages to rise to $2.55, short positions could face liquidations worth more than $40 million.

This dynamic reflects the high-risk environment for traders, where even a small shift in market sentiment could trigger significant price fluctuations.

The Road Ahead for XRP

In conclusion, XRP’s technical analysis and on-chain data suggest that bears currently have the upper hand. The cryptocurrency’s breach of critical support levels, combined with the growing number of over-leveraged positions, makes it vulnerable to further price declines. Traders and investors will need to closely monitor XRP’s price action, particularly around the $2.40 and $2.50 levels, to gauge whether the asset will be able to recover or if it will continue its downward trajectory toward $2.10.