Bear pattern signals decline to $ 2

The most important thing shortly:

• XRP could fall to $ 2 after a break-in as part of a classic head-shoulder pattern.

• The falling open interest in XRP futures signals a dwindling trust of the dealers.

The course of XRP (XRP) has warning signs because a bearish technical pattern dissolves on the lower time frame, which is associated with massive long liquidations and a falling open interest.

XRP head-shoulder pattern indicates a decline of 14 percent

The XRP course has formed a head shoulder pattern (H&S) on the four-hour chart since May 9, which predicts a likely downward movement.

The head-shoulder pattern is a bearish reverse pattern that can signal a trend reversal. It consists of three tips: a higher tip (head) and two lower tips (shoulders).

It dissolves when the course breaks under the neckline (the line that connects the lows of the left and right shoulder), which confirms the pattern and represents a potential sales signal.

In the case of XRP, the pattern was confirmed on May 19 after a break-in and end below the neck section at $ 2.33.

If the course remains below the neckline, the XRP/USD pair could continue to $ 2.25 (where the 200-day SMA is currently) and then slipped to the sample target of $ 2.00. The total loss would be 14 % compared to the current level.

Like cointelegraph reportede, a possible decline is currently possible to up to $ 2.00 because the bullish momentum has subsided.

For the analyst Egrag Crypto, the XRP course must hold the support of $ 2.30, which coincides with the H&S neckline, to avoid a break-in towards these goals.

The analyst divided A chart that shows that a decline under $ 2.30 could trigger a massive sale, the initial goal is $ 2.15. The course could then drop to $ 1.60.

Open interest in XRP will drop by $ 1 billion in 5 days

The open interest (Oi) from XRP has dropped 18 % to $ 4.49 billion in the last five days. This decline of the OI signals a lower trust of the dealers and lower liquidity, which drives the course down.

The latest decline in the XRP course has also led to liquidations over the last day, in which long positions worth $ 12 million were closed, compared to only $ 1.4 million in short positions.

This reflects an increased sales pressure, since bullish dealers are forced to sell with loss, which in turn presses the courses down.

It is noteworthy that XRP's decline was accompanied by 3 % in the last 24 hours from an increase in daily trading volume by 70 % to $ 4.1 billion. An increase in the commercial volume in the middle of a drop in the course can be interpreted as an increasing bear momentum or as a repositioning of crypto mandrators who are waiting for the next step of XRP.

This article does not represent investment advice or recommendation. Every investment and every trade goes hand in hand with a risk and you should research yourself before making a decision.