XRP faces $650M sell risk as charts hint at prices below $1

XRP is facing potential downside risk, with technical indicators suggesting a possible drop below the $1 mark in the coming weeks. This outlook is compounded by an increase in XRP holdings being transferred to exchanges, signaling potential selling pressure.

The cryptocurrency recently experienced a 13% surge to $1.43 over a weekend, but encountered significant resistance between $1.39 and $1.43. This price zone is characterized by a large cluster of XRP acquired within the last 30 days, acting as a barrier to further upward movement. This resistance level aligns with the upper trend line of a symmetrical triangle pattern that has been in effect since February 1st.

Currently trading below the triangle's lower trend line at $1.35, a daily close below this level would confirm the pattern and could lead to a significant correction. The measured target for this pattern suggests a potential drop to $0.95, representing a nearly 29% decrease from current levels. Previous analysis indicated that a break below the $1.20 support level could put the February 6th low of $1.11 at risk, with a subsequent fall towards the psychological $1 support level possible.

Some analysts suggest that if the $1.20-$1.22 support base holds, a rebound towards $1.80-$2.20 could occur, signaling a recovery. However, other chart patterns, particularly on the two-day chart, have indicated a potential drop to $0.80, influenced by selling activity from large holders.

Adding to the bearish sentiment, over 472 million XRP, valued at approximately $652 million, were transferred to Binance in the past week. This represents the largest inflow to exchanges observed in February. Such transfers to exchanges are typically interpreted as a precursor to selling or an effort to increase liquidity near market prices. Analysts note that these inflows can create conditions for a sudden wave of selling pressure that could impact short-term price action.

Consequently, XRP reserves on Binance have increased to 2.73 billion tokens from 2.55 billion in mid-February, a rise of about 180 million tokens (7%) in under three weeks. An increasing supply of XRP on exchanges is generally viewed as a bearish indicator, potentially overwhelming demand and intensifying sell-side pressure.