XRP's Future at a Crossroads: Denial Phase or Bullish Breakout?

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XRP has been riding high for much of early 2025, breaking new price ceilings and gaining momentum, particularly after political and regulatory developments in the United States. However, altcoin's recent rally could be masking underlying dangers. Historical patterns and technical indicators suggest a potential 60% correction, making it crucial for investors to assess the underlying factors.

Is XRP Facing Another "Denial" Phase?

The current state of XRP echoes the market psychology seen before its biggest crashes. According to Glassnode’s Net Unrealized Profit/Loss (NUPL) data, XRP has once again entered the "denial" phase. This phase is a classic indicator of an imminent price drop, having appeared just before previous crashes in 2018 and 2021. In those years, XRP saw price drops of 90% and 75%, respectively, after reaching new highs.

As of March 2025, XRP's NUPL has again surged, signaling a peak in investor optimism. Historically, this signals the calm before the storm, and the likelihood of a significant downturn is high. XRP may be heading into another major correction, with some analysts predicting a 60% drop toward $0.87.

Price Fractals and Technical Indicators: A Bearish Outlook

XRP's technical charts are showing signs of bearish divergence. The price has been trading between $1.80 and $3.40, and while the price action may appear stable, key indicators like the Relative Strength Index (RSI) suggest weakening momentum. This pattern mirrors what happened in 2021 when XRP saw a sharp decline of over 75% from its highs.

In 2025, XRP’s price has once again formed a local top, and RSI is showing a lower high, signaling potential downside. The price is now at risk of falling toward key support levels, such as the 50-week Exponential Moving Average (EMA) around $1.58. A further drop below this support could push XRP to even lower levels, closer to the 200-week EMA, which could bring the price to $0.87 — a drop of 60%.

What’s Driving XRP's Current Price Action?

External factors driving XRP’s recent surge:

• Political developments in the U.S.
• Growing optimism around Ripple’s ongoing legal battle with the SEC
• Donald Trump’s victory in the U.S. presidential election
• Speculation around the approval of a spot XRP ETF in 2025

However, market sentiment is unpredictable, and XRP’s rally may have overstretched, leading to the current consolidation phase. Some analysts, like Stellar Babe, are still optimistic, predicting a 450% upside, but the technical charts suggest that rapid gains often precede deep and swift corrections.

Final Thought

XRP’s future is uncertain, and while the ongoing consolidation phase could eventually lead to a breakout, the technical indicators and historical patterns suggest a significant downside risk. The price fractals, NUPL data, and RSI divergence all point toward a potential 60% drop in the coming months. Investors should be cautious and prepare for the possibility of a major correction, as the "denial" phase may soon give way to the harsh reality of a bear market.

If history repeats itself, XRP could follow the same trajectory as it did in 2018 and 2021 — an initial surge followed by a steep and painful decline. Therefore, it’s crucial to monitor key levels and keep an eye on market sentiment to make informed decisions in the coming weeks.

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