XRP Forms Descending Triangle After Nearing $3: Rally or Major Correction Ahead?

XRP Price Analysis

XRP has experienced a significant rally, marking the completion of wave (5) in its Elliott Wave structure, with a peak near $2.90 on December 3, 2024. This bullish run followed a strong breakout from its previous consolidation phase, fueled by robust market momentum and heightened trading volumes.

The rally successfully broke through critical resistance levels, continuing the long-term bullish trend. However, the recent peak is now showing signs of a corrective phase, with price action consolidating below its recent highs.

The corrective structure appears to form a descending triangle, suggesting the onset of a potential ABC correction. XRP has retraced to the 0.382 Fibonacci level near $2, a key area to monitor for support.

Meanwhile, the Relative Strength (RSI) has declined from overbought territory, reflecting a cooling of upward momentum and signaling a potential consolidation period.

If support at the 0.382 Fibonacci level holds, XRP could stabilize and prepare for a renewed push higher, potentially targeting previous highs and Fibonacci extensions.

Conversely, a breakdown below $2 could open the door for a deeper retracement to the 0.5 Fibonacci level at $1.70, or even show a developing downtrend.

The price action over the next few days will likely determine the short-term direction and clarify whether the correction is nearing completion or has further to go.

XRP Price Prediction

Zooming into the hourly chart, we can see that XRP is currently undergoing a correction phase after completing wave (5) of its impulsive Elliott Wave structure, forming a descending triangle.

The price has now formed an ABC corrective pattern, with wave (a) taking the price down to $2.17, while wave (b) ended at a lower high of $2.63 on December 8. A subsequent decline to a lower low of $1.97 on December 9 could have marked its completion as the price is up by 12% and still in an upward trajectory.

The RSI is recovering from oversold levels, indicating that bearish momentum is waning, but a decisive move is yet to occur. A potential upward breakout would suggest the start of a new uptrend. However, another rejection at the descending resistance could lead to a breakdown below the current support at $2.20 and signal a deeper correction toward lower Fibonacci levels, invalidating the bullish structure in the short term.

Key Levels to Watch

Support Levels:

$2.17 (wave (a) low): Immediate and critical support to sustain the bullish outlook.

$1.97 (0.382 Fibonacci): Strong support zone in case of a deeper correction.

$1.70 (0.5 Fibonacci): Major structural support for a broader retracement.

Resistance Levels:

$2.36: 0.236 Fibonacci level

$2.47: Descending triangle boundary.

$2.90: Previous high and key breakout level for wave (v).

$3.20-$3.50: Fibonacci extensions and potential targets for wave (v).