XRP has entered a dangerous price zone as it drops below the $2 support level, risking a potential 45% crash. Factors such as macroeconomic trends and bearish technical indicators contribute to this decline. However, Ripple’s fundamentals remain solid, with improving legal circumstances and speculation around an XRP ETF offering potential avenues for recovery.

The XRP price has lost the positive momentum it experienced during the fourth quarter, entering a precarious situation that could lead to a significant decline. Ripple’s asset dropped below the critical $2 support level for the first time since early February, as broader trends in the cryptocurrency market continue to sway prices negatively.

The decline in XRP’s value is largely attributed to macroeconomic issues occurring in the United States, particularly recent threats made by Donald Trump regarding substantial tariffs on imports from Canada, Mexico, and China. If implemented, these tariffs could induce stagflation, prompting the Federal Reserve to reduce interest rates unexpectedly. The current Treasury yields have also decreased significantly, with the 10-year yield falling to 4.26% and the 30-year yield to 4.53%, down from near 5% just months earlier.

Despite this downturn, the fundamental aspects underpinning Ripple’s business remain robust. Recent developments have increased the likelihood of a favorable outcome in the ongoing lawsuit with the Securities and Exchange Commission, particularly after the SEC dropped cases against crypto exchanges like Coinbase and Uniswap. Furthermore, there are growing expectations surrounding a possible XRP exchange-traded fund (ETF), which, if approved, could generate billions in investments and increase demand for XRP.

The technical indicators now point toward a potential bearish breakout, as XRP finds itself in a danger zone. The price recently hit a low of $1.9615, which is significant because it served as the neckline in a head-and-shoulders pattern. A break below this neckline typically signals a confirmed bearish trend.

Additionally, XRP’s price has reached the 50% Fibonacci retracement level and is now trading below the 50-day moving average. The Average Directional Index (ADX) has increased to 36, highlighting a strong prevailing trend, as readings above 20 indicate sustained momentum. Should the price continue to decline, it may fall to the crucial 61.8% retracement level at $1.6230, signaling a potential reversal point.

If XRP fails to maintain this support level, further declines could transpire, potentially bringing XRP to approximately $1.13, which represents a 45% decrease from its current price. Such a drop would occur at the 78.6% retracement level, reflecting significant resistance and support dynamics.

In summary, the XRP price is currently facing a critical juncture, having lost bullish momentum and risking a substantial price decrease. Key macroeconomic factors and bearish technical indicators suggest a potential further decline to key Fibonacci retracement levels. Maintaining investor confidence amidst ongoing legal challenges and potential ETF developments will be crucial for Ripple in navigating this precarious market environment.

Original Source: crypto.news

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