XRP Faces Crucial Price Test Will $1.87 Hold or Break

• XRP hovers at key $1.87 neckline, testing Head and Shoulders breakdown risk.
• Shrinking volatility and weak ADX suggest a sharp price move may be imminent.
• Open interest climbs to $1.6B, with futures up 9.35% amid breakout speculation.

The price of XRP is at a major technical inflection point as it tests a vital support level that forms the “neckline” of a potential Head and Shoulders top pattern. The formation, highlighted by veteran analyst Peter Brandt, has put the market on high alert, as a break of this level could determine the asset’s next major directional move.

XRP is currently trading at $1.97, showing a mere 1.80% increase over the last 24 hours, still down 14% over the past seven days. The focus has now shifted entirely to the chart’s structure.

Neckline at $1.87 Is the Key Level to Watch

Brandt identifies the April 7 spike as a likely anomaly, suggesting it shouldn’t distort the H&S symmetry. The neckline, near $1.87900, has since been retested multiple times. 

Despite the bearish implications often linked to H&S formations, Brandt insists that the pattern need not be interpreted as bearish just yet. XRP previously broke out from a long-term wedge, triggering a powerful rally to the $3.20 range. This high was followed by tight consolidation, creating what appears to be a high-tight flag.

Related: XRP Price Struggles Near $2.02 as Bulls Fail to Reclaim EMA Resistance

Hence, the neckline serves as the current battleground between bulls and bears. Price is now hovering near this critical support, which acts as a litmus test for future direction. A decisive weekly close below $1.87 would validate the H&S pattern and suggest downside risks. Otherwise, the setup could simply be a pause in a larger bullish trend.

Volatility Compresses, Eyes on Momentum Indicators

Interestingly, market volatility is shrinking. The average true range has fallen to 0.4860, often a sign that a sharp move is coming. 

Simultaneously, the ADX reads just 16.41, indicating that trend strength is fading. When combined, these signals suggest a potential breakout or breakdown in the near term. Traders should closely monitor volume and directional strength indicators for confirmation.

Open Interest and Market Structure Provide Clues

XRP’s total open interest stands at $1.6 billion, with perpetual contracts dominating the market. Binance leads exchange rankings with $685.6 million in open interest, followed by Bybit and OKX. 

Related: XRP Price Prediction: Big Move Ahead as Market Calm Sets the Stage for Breakout

Additionally, the 0.50% increase in total open interest over the last 24 hours suggests traders are bracing for a potential breakout. Futures saw a notable 9.35% jump, signaling rising speculative activity.