XRP is currently trading above $2, but experts are predicting a significant dip in its price if Bitcoin (BTC) undergoes a major correction. Recently, the cryptocurrency market experienced a slight recovery after a sharp downturn. Bitcoin briefly rallied to $83K, and XRP reclaimed the $2.20 mark after falling below $2. However, market analysts caution that the potential for further price drops is still high.

Edoardo Farina, the founder of Alpha Lions Academy, has shared his analysis of a potential bearish scenario for XRP. He discussed the factors that could lead to a drastic decline in XRP’s price and how investors can navigate this situation.

Worst-Case Scenario for XRP

Farina explained that Bitcoin’s performance has a significant influence on XRP’s price movements. If Bitcoin fails to maintain its crucial $72K support level, it could trigger a sharp decline that brings BTC closer to the $50K range. Currently, Bitcoin is trading around $83,000 and is near the 61.80% Fibonacci retracement level on the daily chart. The analysis of this level suggests that there is a potential for a post-retest reversal, which could cause Bitcoin to drop to $75,000, aligning with the 50.0% Fibonacci level.

Such a Bitcoin decline would likely cause a chain reaction, dragging XRP’s price lower as well. In this worst-case scenario, Farina predicts that XRP could fall to as low as $1.20, which would represent a 45% drop from its current level. The sharp decline could cause panic among investors, and it could trigger a wave of selling pressure in the broader crypto market.

However, Farina also anticipates that this price drop will not last long. He suggests that XRP could experience a flash crash, briefly dipping as low as $0.90, marking a 59% decline from current levels. While the likelihood of such a crash is low—Farina estimates it at around 20%—he advises investors to be prepared for such a move, as the crypto market is known for its volatility.

Preparing for the Dip

In response to the potential drop, Farina recommends setting strategic buy orders below $1, which would allow investors to take advantage of the dip. He remains confident that XRP will not stay below the $1.20 support level for an extended period. Even if the worst-case scenario occurs, he believes that XRP will likely rebound quickly from these lower levels.

“If this happens, I expect XRP to bounce above $2 quickly,” Farina said, offering a sense of optimism for long-term holders of the cryptocurrency. He encourages investors to view any short-term price drops as opportunities to accumulate more XRP at discounted levels.

Other Bearish Signals

Apart from Bitcoin’s potential impact, other analysts have pointed out bearish signals in XRP’s chart that could signal a decline. Specifically, some have identified a head and shoulders pattern, which is traditionally seen as a sign of an impending correction. This pattern suggests that XRP may experience a major price correction before it can recover and reach new highs.

While the head and shoulders pattern raises concerns, Farina remains optimistic that XRP will eventually find support and bounce back. He advises investors to remain cautious but to take advantage of potential dips for long-term gains.

In conclusion, while there are risks of a sharp decline in XRP’s price due to external factors like Bitcoin’s performance and bearish chart patterns, experts like Farina believe that any dip will likely be short-lived. By setting buy orders at strategic levels, investors can position themselves to benefit from the potential rebound once the market stabilizes.