XRP Price Closes February With a 35% Correction — Recovery Looks Unlikely

Key Takeaways

• Despite starting the month around $3, XRP’s price is on the verge of finishing the month below $2.
• The volume and open interest have also fallen this month’s peaks, reinforcing the bearish trend.
• The daily chart shows a death cross, indicating that XRP’s price could experience a double-digit fall.
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At the beginning of the month, XRP’s price was above $3. Today, as February continues, the value has plummeted by 35% and looks set to close below $2 — the lowest it has reached this year.

This pullback has shaken XRP holders’ confidence amid extreme market fear. With bearish momentum dominant, XRP faces a tough battle to regain the uptrend it experienced earlier.

XRP Sees Decline in Several Areas

One key factor contributing to XRP’s challenging recovery is a significant decline in trading volume. On Feb. 3, XRP saw a surge in volume, surpassing $40 billion.

However, as of this writing, that figure has fallen below $8 billion, raising red flags for potential price action. Typically, rising volume alongside a price increase signals strength and potential for further gains.

But with dwindling volume, it becomes increasingly difficult for XRP to maintain upward momentum.

Therefore, if this downward trend in volume continues, XRP’s price action could weaken further, making a notable recovery less likely.

Furthermore, one other metric that aligns with the XRP’s bearish position is the Open Interest (OI). OI represents the total number of open positions in a contract, which changes based on net positioning—either long or short.

When the OI increases, buyers are likely more aggressive than sellers, and market participants are increasing their net positioning.

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Similarly, when OI decreases, market participants are reducing their positions, which is a sign of decreased exposure to the cryptocurrency.

The OI is likely to continue falling, which means XRP’s price correction might extend into next month.

XRP Price Struggles With Support

From a technical perspective, the Moving Average Convergence Divergence (MACD)  has consistently flashed red histogram bars. Until Sunday, Feb. 23, the MACD reading was positive, indicating bullish momentum around XRP.

The indicator’s rating indicates bearish momentum, especially as the 12-day Exponential Moving Average (EMA) has crossed below the 26 EMA. Typically, when the shorter EMA flips above the longer EMA on the MACD, it means that the trend is bullish.

However, in this scenario, the 12 EMA (blue) crossed below the 26 EMA (orange), indicating a bearish trend. Considering this position, XRP’s price might fall below the 0.50 Fibonacci retracement level.

If this happens, then the token might decline to $1.60. Should selling pressure intensify, the cryptocurrency’s value might drop to $1.17.

Alternatively, this correction might not extend further if XRP fails to slide under the 0.50 Fib level.

Instead, XRP’s value might rally to $2.78. When the bull market resumes full-time, the value could rise to $3.40.