XRP Price News: XRP Could Drop to $1.20 as Relief Rally Craters

XRP (XRP) was the worst-performing token in the top 5 during the latest relief rally, as the token booked a 1.3% loss in the past month while other altcoins like Solana (SOL) and Ethereum (ETH) rose by nearly 10%.

The token is currently hitting a key support at $1.33 that is critical to determine where XRP will be heading in the next few days.

Exchange Inflows Are Rising Again – Are Whales Preparing to Dump XRP?

On-chain data from Santiment shows that XRP exchange inflows have been rising since March 24. The 30-day moving average has moved from 1 million to 1.79 million, confirming that whales are loading up their exchange wallets.

These spikes in inflows have typically preceded strong downtrends, as they mean that tokens are being moved out of cold storage and into liquid marketplaces to be sold.

We got a similar uptick in XRP exchange inflows from March 16 to 20. Back then, the token progressively dropped from $1.55 to $1.39.

Trading volumes remain relatively low despite the selling pressure, sitting at $2 billion and accounting for just 2.5% of the token’s circulating market cap.

Meanwhile, crypto liquidations rose to $280 million, which is a relatively low figure considering the strength of today’s drop.

However, a break below the $1.33 mark could set the stage for a much deeper downturn to the $1.20 area, meaning a 10% downside risk for the native asset of the XRP Ledger.

XRP’s “Fakeout” at $1.55 Signals Weak Buying Interest

Market sentiment soured in the past few days, dropping from a recent peak of 46 to 27 at the time of writing, as investors struggle to have faith in these latest attempts to recapture that key level.

XRP recently rallied to $1.55 around ten days ago, but the selling pressure quickly accelerated as the Relative Strength Index (RSI) in the 4-hour chart flashed “overbought”.

Now the oscillator has broken below the 14-period moving average once again, which is often interpreted as a sell signal.

Today’s decline is plunging XRP back into its consolidation pattern, confirming that this recent spike was nothing more than a “fakeout”.

Buyers don’t seem to have the required ammunition to sustain the rally. Hence, the odds favor a bearish outlook if we break past the $1.33 demand zone.

Hourly “Sell” Signal Confirm That Institutional Volumes Are Behind This Move

Heading down to the hourly chart, we got a sell signal right after the American session started. These are high-conviction “decisional” candles that feature above-average volumes.

They tend to indicate institutional or whale participation in a specific price move, and we consider them high-probability trading signals if they happen right after a key level breakout.

If the $1.33 threshold is broken after this “sell” signal, that would further confirm that XRP is heading downwards, with that $1.20 target in sight.

This would give us a 4x risk-reward trading opportunity if we set the stop loss right above that $1.33 mark. Keep an eye on this altcoin.