XRP Crashes Over 15% in 24 Hours, Forming Bearish Head and Shoulders Pattern

XRP is crashing hard. In the last 24 hours alone, it has dropped over 15%, trading at $2.08, while its market cap has fallen to $120.57 billion.

XRP has crashed over 15% in the last 24 hours, hitting another blow to crypto investors. The seventh-largest cryptocurrency by market cap is currently trading at $2.08, dropping sharply from a recent high of $2.60.

As a result of the sell-off, XRP's market cap has fallen to $120.57 billion. However, trading volume has surged to $10.72 billion, indicating massive market activity. Over the past month, XRP has lost more than 30% of its value.

While XRP's decline is part of a broader market downturn, with Bitcoin failing to cross $100,000 and other major cryptocurrencies also in the red, XRP's drop has been particularly sharp due to a combination of factors.

Recently, XRP faced resistance at $2.60 and failed to push past this crucial level, triggering a wave of selling pressure. This made it harder for the price to recover from the sell-off.

According to a popular crypto analyst on Twitter, XRP is at another crucial decision point, with the key level being $2.6052. If XRP manages to cross this level, and another significant level at $2.77, it could continue moving up in a bullish trend.

Another crucial factor that contributed to XRP's sharp decline was the liquidation of nearly $57.94 million in XRP futures in the past 24 hours. Of this total, a majority, amounting to $53.58 million, belonged to long positions, indicating that traders who anticipated a price increase were compelled to sell their holdings, exerting further downward pressure on XRP's price. Only $4.36 million of these liquidations were from short positions, highlighting how bullish traders were caught off guard by this sell-off.

The XRP futures funding rate, which reflects the demand for long positions, also dropped sharply from 0.25% per week on Feb. 23 to just 0.04% on Feb. 24. This indicates that traders are becoming more cautious and less inclined to bet on XRP's price rising.

On the technical chart, XRP has formed a classic bearish head and shoulders pattern. If the price breaks below the neckline support at $1.79, the next support level lies around $1.6130, which aligns with the 61.8% Fibonacci retracement level. If this level is breached, a deeper crash could follow.

For XRP to recover, it needs to reclaim the 50-day simple moving average (SMA) at $2.73. If that happens, a rally toward $3.40 could be in the cards. However, if the bearish sentiment continues, further declines are possible.