XRP, which surged to a new yearly high of $3.66 weeks ago, has seen a sharp decline, dropping below $3 following the broader crypto market correction. Currently trading around $2.94, XRP is down over 19% from its peak. While some traders remain optimistic about a potential recovery, others believe the correction is far from over, with a few key technical indicators signalling further downside.
Analyst Ali Martinez Predicts Continued Correction
Ali Martinez, a well-known market analyst, is among those who believe XRP’s correction may continue. In a recent thread on X, Martinez highlighted several critical indicators that suggest XRP could still have more room to fall before stabilizing.
First, Martinez pointed out the Tom DeMark (TD) Sequential indicator, which flashed a sell signal on XRP’s 3-day chart at the recent peak. Since the signal appeared on August 3, XRP has steadily pulled back. Martinez believes this sell signal directly influenced the ongoing correction.
Additionally, Martinez emphasized on-chain data showing that while XRP held above $3 for some time, the price is now supported only temporarily around the $2.80 range. He believes the $2.48 level is the next critical support zone for XRP if it continues to decline.
Related article: Galaxy Digital’s $34 Million XRP Holding Marks Strategic Expansion into the Digital Asset Market
Whale Selloff Adds Pressure to the Correction
Another concerning factor for XRP is the recent whale activity. On August 2, Martinez reported that large investors had sold over 710 million XRP within 24 hours. This massive selloff suggests a loss of confidence among large investors, further fueling the ongoing correction.
Martinez also flagged the MVRV ratio, which recently flashed a death cross. This indicator suggests that XRP might be overvalued at its current price, reinforcing his belief that the token could face a deeper correction.
Key Levels to Watch for a Possible Recovery
Despite the bearish outlook from Martinez, other analysts believe there may still be hope for XRP’s recovery. Dom, another well-followed trader, noted that XRP bounced from the support zone he had previously predicted, which he sees as a positive sign. However, Dom emphasized that XRP must reclaim $3 as a strong support level and break above $3.12 to negate the current downtrend and shift into a bullish market.
Early Signs of Strength Amid the Pullback
While some analysts remain cautious, others see early signs of strength. EGRAG Crypto observed that XRP has been managing to close several candles above the psychological level of $3, which suggests that the bulls aren’t backing down just yet. Despite some selling pressure, the full candle bodies have stayed above this key level.
However, EGRAG warned that XRP might dip briefly into the $2.96 to $2.93 range before testing stronger support levels. If XRP can hold above $2.80, the bullish case remains intact. A push past $3.185 could lead to $3.25, and closing above $3.33 and $3.45 could open the door to a new all-time high.
Conclusion: Will XRP Break the Correction?
XRP’s price action remains uncertain as it struggles to regain momentum after its peak. While some analysts point to signs of strength and potential for a bullish reversal, others, like Martinez, believe the token could face further downside before stabilizing. Key levels, such as $2.80, $3, and $3.12, will be crucial in determining the next phase for XRP.
