XRP's Descent Below $3: Is a Further Price Drop Imminent?

XRP has plunged beneath the critical $3 support level once again, intensifying bearish sentiment around the cryptocurrency. According to an analysis published on October 4 by Cointelegraph, experts are cautioning against further downside potential, with projections suggesting a drop to $2.60—a 15% decline from its current position.

The downturn has reignited concerns after XRP's repeated struggles to maintain levels above $3 since its rally last November. A series of failed breakouts, or "fake outs," has repeatedly sent the cryptocurrency into retreat. At present, XRP is trading near support levels around the 4-hour 200 Exponential Moving Average (EMA), a crucial technical indicator that could dictate the short-term trend.

Bearish Signals Persist in Technical Indicators

A deeper look at XRP's technical landscape reveals mounting risks of further declines. The current price pattern mirrors the bearish momentum observed in September, characterized by a "rounded top-triangle convergence-decline" structure. This formation led to XRP's slide to the $2.70 range last month, and now, a similar bearish flag pattern has reappeared on the 4-hour chart.

Adding to this is XRP's Relative Strength Index (RSI), which has started to pull back from overbought territory on shorter timeframes. This shift signals that the cryptocurrency still has room for further downside correction. Analysts are zeroing in on $2.93 as a near-term support level within the bearish flag structure. Should this level fail to hold, the price may drop to $2.60—a zone that aligns closely with the asset's 200-day moving average (MA), making it a critical area to monitor.

Liquidity Data Highlights Weakness Below $3

Market liquidity data further underscores the downside risks for XRP. Insights from CoinGlass, a leading data analytics platform, reveal a significant cluster of long positions, valued at over $500 million, sitting between the $2.89 and $2.73 price range. If XRP remains below $3, it could trigger a wave of liquidations, intensifying the selling pressure and accelerating the decline.

However, it isn't entirely bleak for XRP. A potential rebound within the $2.93 support range, or near the 50-day EMA at $2.52, could set the stage for a recovery. If the cryptocurrency manages to regain the $3 threshold, it could pave the way for upward movement toward the $3.20-$3.40 range. In this scenario, the liquidation of short positions could provide a positive catalyst, bolstering further buying activity and momentum.

What’s Next for XRP?

XRP finds itself at a pivotal juncture, with its short-term fate resting heavily on technical and liquidity factors. The next few trading sessions will be critical, as they may determine whether the cryptocurrency stabilizes near its current levels or continues its descent toward $2.60.

For now, traders and investors are closely monitoring XRP's ability to reclaim and consolidate above the $3 level. This key support-resistance zone will likely dictate the asset's direction in the coming days. Whether XRP can reverse its recent slump and regain bullish momentum remains an open question, but its current state offers both risks and opportunities, depending on how these key levels play out.

As the crypto market watches closely, XRP’s next move will provide further insights into its mid-to-long-term trajectory in an increasingly volatile space.