XRP’s Uptrend Faces Potential Threats Amid Technical Patterns and US Government’s Altcoin Strategy

• XRP faces significant challenges as technical indicators and market sentiment point towards a potential downturn amidst shifting political support.

• Recent statements from the US government highlight its strategy towards digital assets, particularly the focus on Bitcoin, sidelining altcoins like XRP that could impact investor confidence.

• According to COINOTAG, “The market currently shows signs of fatigue with XRP, and unless we see renewed bullish momentum, further declines are likely.”

XRP is under pressure from technical patterns and shifting government strategies, indicating a potential 20% price decline in the near future.

XRP price chart signals a looming 20% decline

XRP/USD is exhibiting a symmetrical triangle formation on its weekly chart, a pattern that often reflects indecision between market participants. This technical structure can be indicative of impending volatility, rather than assured upward movement.

XRP/USD weekly price chart. Source: TradingView

Importantly, symmetrical triangles do not guarantee a bullish continuation. Historical data shows that such patterns can lead to breakout events that result in declines. For instance, Ethereum experienced an 80% drop following a similar triangle breakdown in 2018.

ETH/USD weekly price chart featuring symmetrical triangle breakdown from 2018. Source: TradingView

If this pattern continues with XRP, projections suggest a downside target around $1.46, which coincides with the critical 50-week exponential moving average, suggesting increased selling pressure may be on the horizon.

Political shifts impact XRP’s market perception

XRP’s market valuation took a hit after the White House’s inaugural Crypto Summit on March 7, where initial hopes of inclusion in a US strategic crypto reserve quickly faded. Interestingly, President Donald Trump’s administration emphasized Bitcoin instead, indicating a clear preference away from altcoins.

While the summit included mentions of various cryptocurrencies, officials later clarified that these were merely illustrative and not indicative of official designations. The markets reacted negatively, evidenced by a roughly 10% drop in XRP’s value following this clarification.

@DavidSacks, why the sudden retraction regarding XRP’s presence in Trump’s crypto reserve narrative?

Almost as if there was external pressure involved.

Everyone is aware of XRP’s significance and the ongoing suppression while every other SEC case gets resolved. Why… pic.twitter.com/96x6ZvBlIE

— Jason Higgins 🇺🇸 (@JasonTrading589) March 7, 2025

Moreover, there is currently no confirmed holding of XRP by the US government. Trump’s strategy, which involves altcoins, notably excludes new XRP purchases, further weighing down market sentiment. This shift could exacerbate XRP’s tensions with Bitcoin, which reportedly holds around $17.7 billion in the US treasury.

On the technical side, the XRP/BTC trading pair is experiencing consolidation above the critical 200-2W EMA at approximately 2,459 satoshis. A drop below this level could amplify selling pressure, potentially pushing XRP towards 1,700 satoshis and triggering further declines in XRP/USD.

XRP trading volume signals potential bear market

In recent days, XRP has seen a significant surge in trading volume, with analysts like Martunn noting that such spikes typically occur during distribution phases. This phenomenon involves larger holders offloading their positions to retail investors after periods of substantial price increases.

XRP volume trends. Source: CryptoQuant

This spike in volume coincides with XRP’s impressive 600% surge from November 2024 to January 2025, a classic scenario for market distribution. Historical comparisons show that a similar volume surge occurred before prolonged declines, suggesting that XRP could face another substantial correction soon.

Furthermore, a decline in holdings by large investors, or whales, is noteworthy. The whale balance has decreased from 94.21 billion to 90.21 billion XRP over the past year, retracing the gains seen post-elections.

XRP addresses with significant balances. Source: Messari

When notable holders sell off their assets, it typically indicates a lack of confidence in the asset’s performance, as these players often have exclusive insights into market dynamics. Their liquidation can create a ripple effect, leading smaller investors to follow suit, thus amplifying downward pressure in the market.

Conclusion

In summary, XRP stands at a precarious junction as technical patterns, governmental strategies, and trading behaviors signal the potential for a downward shift in price. Investors should remain vigilant and reassess their positions as the market unfolds, particularly in light of the current signals that suggest a possible decline of up to 20%.