XRP, the native token of Ripple Labs, continues to face significant downward pressure. On December 31, XRP’s price dropped 2.62%, reaching $2.02. While the broader cryptocurrency market is also experiencing a downturn, XRP’s technical and on-chain indicators suggest that further declines could be on the horizon. Analysts are predicting a possible 10-12% drop, with XRP potentially reaching the $1.83 support level in the short term.

XRP Faces Continued Bearish Sentiment

The overall market sentiment for XRP remains bearish as we approach the end of 2024. Despite the popularity and utility of XRP in cross-border payments, the cryptocurrency has struggled to maintain its upward momentum. XRP’s price has recently broken out of a descending triangle pattern, signaling that the market sentiment is shifting towards a more bearish outlook. This technical breakdown has fueled expectations that the price could continue to decline unless a reversal occurs.

Technical Analysis: Support Levels and Key Indicators

According to expert technical analysis, XRP has retested its breakdown level, which further supports the possibility of continued price declines. On the daily chart, the recent breakdown of the triangle pattern has led to a shift in market sentiment, with a bearish trend taking hold. XRP’s price has been unable to sustain above key support levels, and the next target appears to be around the $1.83 mark.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators also suggest weakness in XRP’s short-term price action. The RSI is heading towards the oversold territory, which historically indicates that the asset could experience further declines. Similarly, the MACD, which measures the momentum of price movements, is showing weak buying pressure and an increase in selling activity.

If XRP’s price fails to hold the $2.00 support level, a deeper correction toward the $1.83 mark is likely. The next key support zone to watch would be the $1.80 area, which has historically been a significant level for the token.

On-Chain Metrics: Outflow of XRP from Exchanges

Despite the current bearish outlook, there are signs that investors remain optimistic about XRP’s long-term prospects. On-chain data from the analytics firm Coinglass reveals that exchanges have witnessed significant outflows of XRP tokens over the past few days. This means that a substantial amount of XRP is being transferred from exchanges to unknown wallets, potentially indicating that investors are accumulating the asset during the dip.

This on-chain metric suggests that while short-term market sentiment may be bearish, long-term investors are taking advantage of the lower price levels to add to their holdings. This could create buying pressure in the future if the price stabilizes at lower levels.

Increased Trading Volume Amidst Price Decline

XRP’s price decline has been accompanied by a sharp increase in trading volume, which surged by 90% in the past 24 hours. This spike in volume indicates heightened activity in the market as traders and investors react to the price movement. The increase in volume could point to the possibility of more volatility in the coming days, as traders adjust their positions based on short-term market sentiment.

Although this surge in volume could suggest that market participants are actively trading XRP, it also highlights that a portion of the trading activity is driven by panic selling as prices fall. Investors will be keeping a close eye on how the market reacts in the coming days to gauge whether a rebound or further decline is imminent.

The Bigger Picture: XRP’s Long-Term Potential

While the short-term outlook for XRP remains bearish, the cryptocurrency’s long-term potential still holds promise. XRP has consistently been seen as a leading asset in the payments space, offering fast and cost-effective cross-border transactions. Ripple’s ongoing legal battle with the SEC is still a key factor influencing XRP’s price, but investors remain hopeful that a favorable outcome could unlock greater growth and adoption for XRP in the future.

In 2025, if market conditions improve and Ripple’s regulatory issues are resolved, XRP could experience a significant rebound. However, for now, the immediate outlook is cautious, with bearish pressure expected to continue in the short term.

Conclusion: Bearish Short-Term, Bullish Long-Term

As we close out 2024, XRP’s price faces significant challenges, and the short-term outlook remains bearish, with a possible decline to the $1.83 support level. However, the outflow of XRP from exchanges signals that long-term investors remain confident in the asset, viewing the current dip as a buying opportunity. The next few days will be crucial in determining whether XRP can rebound or if it will continue to struggle under bearish pressure.