XRP Price Forecast: Could XRP Drop to $2 After Breaking Out of Consolidation?

Despite this setback, XRP is the only cryptocurrency in the top 5 that currently boasts a positive year-to-date return as its legal victories and a change in leadership in the U.S. Securities and Exchange Commission (SEC) have managed to boost its performance.

Trading volumes in the past 24 hours have declined a bit as the selling spree doesn’t seem to have gained much traction.

CME Group Launched XRP Futures

A week ago, the CME Group approved its first-ever XRP-linked futures. Two contracts are now available for traders to speculate with this popular cryptocurrency.

The micro contract is made up of 2,500 XRP tokens worth an approximate of $5,000 at the time of writing while the regular contract consists of 50,000 XRP tokens worth a total exceeding $100,000 each.

These new derivatives should bring in higher demand toward this cryptocurrency and could contribute to increasing its price to higher levels during bullish cycles.

On their first day of trading, $19 million worth of XRP futures exchanged hands to inaugurate their launch.

This is a positive and supportive step toward the approval of an exchange-traded fund (ETF) linked to XRP – the next big milestone that the market is eagerly awaiting. Data from Polymarket wagers give an 83% approval odds to an XRP-linked ETF before the end of this year.

ETF experts like James Seyffart from Bloomberg have emphasized that it is customary for the SEC to take the maximum length of their approval periods to analyze and make a decision about ETF submissions.

The agency postponed its decision on an XRP ETF recently and set a new due date for October this year.

XRP Broke its Bullish Structure Recently

In the meantime, the token seems to have entered a distribution phase as indicated by its latest price action.

The daily chart shows that XRP hit a strong ceiling at $2.65 and experienced a significant retreat to its current levels right after the second tag. This is known as a double-bottom pattern and explains the latest bearish price action.

The price action also broke its bullish structure and is now retesting a key support at around $2.25. This has been the most critical level to watch in the past few days and a break below could spell trouble for XRP.

Momentum indicators have been steadily dropping since this change of character and are now favoring a bearish outlook for XRP. Similarly, the MACD’s histogram has been posting steadily increasing negative readings, which also favors a bearish outcome.

Now heading to the hourly chart, the situation looks dire for XRP as the price broke below its consolidation and could now be heading to retest the $2.10 level, which is the most relevant support area in the higher time frames. This would result in an 8% decline from current levels.

Although this is pretty bad in the near term, it may be what XRP needs to reignite its rally as liquidity has dried up in the past few weeks in the absence of another bullish catalyst that rescues the price from these boring ups-and-downs.

In summary, XRP’s price action seems bearish and short sellers may have a blast if this bearish breakout is confirmed in the next few hours by a retest of this former support at around $2.27.