XRP Declines Sharply as Analysts Signal Deep Correction Risks
XRP, the cryptocurrency associated with Ripple Labs, fell 4.73 percent on Monday to $2.40, making it one of the weakest large-cap digital assets during a broader market retreat. The decline follows a series of bearish technical signals that point toward a possible 50 percent correction from current levels.
Market data shows XRP testing its lowest levels since early July, with intraday prices ranging between $2.38 and $2.53. The cryptocurrency’s total market capitalization now stands near $135 billion, with momentum weakening amid renewed dollar strength and fading optimism across the digital asset market.
Broader Crypto Weakness and Fed Comments Pressure XRP
XRP’s decline comes as major cryptocurrencies face synchronized selling. Bitcoin fell 2.5 percent to trade below $108,000, while Ethereum slipped 4 percent to around $3,720. Other assets such as Binance Coin and Solana posted declines exceeding 5 percent.
Analysts link the sell-off to recent statements from Federal Reserve Chair Jerome Powell, who said a December rate cut is “not guaranteed”, reducing investor expectations for near-term monetary easing. According to eToro strategist Simon Peters, “the market’s perceived probability of a December cut plunged from 96 percent to below 70 percent within hours,” driving a stronger U.S. dollar and weakening crypto sentiment.
Dollar Strength Adds Downward Pressure Across Markets
The U.S. dollar index has climbed to its highest level since August, marking a fourth straight day of gains. This strength has created headwinds for dollar-denominated assets such as cryptocurrencies, which typically move inversely to the greenback.
“Every uptick in the dollar tightens the pressure valve on crypto valuations,” explained currency strategist Joel Kruger of LMAX. “Given XRP’s relative volatility, it reacts more sharply than Bitcoin when the dollar strengthens.”
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Technical Breakdown Confirms Bearish Reversal
XRP recently broke below a key wedge formation that had been developing since mid-summer. The breakdown invalidated what was initially seen as a bullish setup, transforming it into a bearish continuation pattern. Technical indicators further confirm growing downside risk.
The token is trading well below both the 50-day exponential moving average (EMA) at $2.71 and the 200-day EMA at $2.62 — a configuration that typically signals a developing downtrend. Analysts warn that failure to reclaim these resistance levels could accelerate selling pressure.
Fibonacci Extension Targets Suggest 50% Downside Potential
According to Damian Chmiel of FXStreet, the next major technical targets for XRP lie between $1.90 and $1.25, marking potential declines of up to 50 percent from current prices. The $1.25 level coincides with the 100 percent Fibonacci extension of the downtrend that began in July, reinforcing its role as a critical support zone.
“This structure implies that bears have regained control,” said Chmiel. “Unless XRP can close above $2.60 and sustain momentum, a gradual descent toward the $1.25–$1.30 range looks increasingly probable.”
Institutional Distribution Adds to Selling Pressure
On-chain data also points to accelerating institutional distribution, with long-term holder outflows up more than 2,600 percent in the past week. Whale addresses controlling 10 million to 100 million XRP tokens have collectively sold over 90 million XRP, according to CoinMetrics data.
This shift from accumulation to distribution aligns with weakening technical sentiment, confirming that institutional participants are offloading positions amid uncertain macro conditions.
Outlook: XRP’s Path Hinges on Key Support Levels
Despite the near-term bearish tone, some traders maintain that XRP could stabilize if it holds above the $2.20–$2.30 support band. This zone has previously acted as a key liquidity base, attracting dip-buying during prior drawdowns.
If buyers defend this level, XRP could rebound toward $2.60, reclaiming short-term moving averages. However, a confirmed close below $2.20 would open the path toward deeper declines, with analysts identifying $1.90, $1.61, and $1.25 as successive downside targets.
As global markets remain volatile, XRP’s next moves will depend heavily on broader risk sentiment and the dollar’s direction. “Crypto is moving back into a defensive mode,” said Peters. “Until confidence returns, traders are more likely to sell into rallies than buy the dips.”
