XRP Faces Correction: Overbought Levels and Fed Policy in Focus

XRP Faces Correction: XRP Retreats to $2.26 After Hitting 5-Year High of $2.90

After reaching $2.90, its highest level since January 2018, XRP has fallen 22.25% in the past month. On January 10, it was trading as low as $2.26. The main causes of the price drop have been profit-taking brought on by XRP’s overbought levels, solid US economic statistics, and the Federal Reserve’s hawkish turn.

XRP Symmetrical Triangle Signals Potential 40% Drop or Surge to $3.46

On the daily candle chart, the price of XRP forms a symmetrical triangle with convergent trendlines joining lower highs and higher lows. Usually, this pattern suggests that the market is unsure and that a big price breakout could occur in either direction. The higher trendline of the triangle, which has historically preceded dips toward the lower trendline, is where XRP is currently trading as of January 10. To put it another way, a drop in the direction of the 50-day exponential moving average (50-day EMA; red wave), or $2.05.

By February, the price of XRP may have dropped by almost 40% from its present level to $1.36 if there is a clear break below the lower trendline. The probable breakdown point at the triangle’s apex, which is close to $2.18, is subtracted from the triangle’s maximum height to determine this downside objective. On the other hand, if the triangle’s maximum height is added to the possible breakout point at about $2.18, a clear break above the top trendline may push XRP toward $3.46.

XRP Price Consolidates Between Fibonacci Levels: Breakout or Breakdown Ahead?

XRP has been consolidating inside the $1.98–3.03 price range on the weekly timescale chart, which corresponds to its 1.0 and 1.618 Fibonacci retracement lines. After testing the $1.98 level as support, XRP/USD rebounded a week later on January 10. But its upward momentum has stalled, and as of this week’s session, the price has dropped by about 4%.

The possibility of a more severe reversal shortly is highlighted by the fact that the weekly relative strength index (RSI) for cryptocurrencies is still above the overbought threshold of 70. XRP may retest the $1.98 support level in the upcoming days or weeks if bears win out. A clear break below this level would further raise the possibility of a decline below the 20-week EMA (the purple wave), which is already trading close to $1.50 and has previously been used as a correction target during comparable overbought situations.

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