XRP, one of the leading cryptocurrencies by market cap, has seen a sharp decline in the past 24 hours. The digital asset is currently trading at $2.06, marking a loss of more than 5% in a single day. This sudden drop has triggered concern among traders and investors, as it comes in the wake of a broader market correction led by Bitcoin. Historically, XRP has closely followed Bitcoin’s price trends, and this latest dip appears to be no different.

Bitcoin’s pullback has had a ripple effect throughout the crypto market, with altcoins like XRP taking a hit. The correlation between Bitcoin and altcoins is well-documented, and XRP’s behavior aligns with this long-standing pattern. When Bitcoin rises, it usually pulls other coins upward. But when it corrects or faces resistance, most altcoins mirror the downturn, often with greater volatility. This scenario seems to be playing out yet again.

Technical analysts have noted a bearish formation emerging on XRP’s price chart. The asset appears to be forming what is known as a “head and shoulders” pattern. This classic chart setup typically signals an upcoming reversal in trend, especially after a prolonged upward move. In XRP’s case, the neckline — the support level that connects the low points between the head and shoulders — is situated between $2.10 and $2.15. XRP has recently slipped below this key support zone, raising red flags about a potential extended downturn.

The head and shoulders formation, if confirmed, could lead to more losses. While the current decline might seem like a normal pullback, this chart pattern often precedes a more significant price drop. Traders are watching closely to see if XRP can recover above the neckline, or if it continues to fall, which would validate the bearish outlook.

At the same time, another layer of analysis paints a more complex picture. Some analysts are turning to Elliott Wave Theory to understand XRP’s current cycle. According to this theory, XRP is believed to be in the final phase of a five-wave upward movement. The first four waves have already played out, marked by bullish runs followed by minor corrections. The fifth wave, which is now in progress, is typically the last upward push before the asset undergoes a larger correction or consolidation.

This fifth wave often ends with a surge to new highs, only to be followed by a significant reversal. The risk here is that even if XRP manages to rally in the short term, it could still face a sharp decline once the wave completes. For traders, this means there may be limited upside before a potential sell-off resumes.

Zooming in to a shorter time frame, XRP has also completed a smaller five-wave rally that started in April. Since reaching its local peak, the asset has entered what analysts describe as a three-wave corrective phase. This is a common occurrence in crypto markets, where prices often follow predictable patterns of movement based on investor behavior and market psychology.

Current forecasts suggest that XRP’s correction may not be over just yet. Experts anticipate one more downward leg before the coin finds a strong support base. The ideal correction range is projected between $1.27 and $1.79, with the possibility of a final drop to as low as $1.23. If this zone holds and buying interest returns, it could pave the way for the next bullish leg.

While the short-term outlook appears cautious, the longer-term fundamentals for XRP remain intact. Ripple Labs continues to make strides in global finance, forming new partnerships and gaining regulatory clarity in some regions. These developments could provide a strong foundation for future growth once the current market volatility subsides.

For now, investors and traders should proceed with caution. The charts suggest that the current pullback could deepen before any meaningful recovery begins. Whether XRP rebounds or drops further, one thing is clear — the next few days will be critical in determining the coin’s direction in the weeks to come.