XRP Prints Same Market Structure as February 2022. What Does This Mean for Buyers?

XRP rebounded after falling to $1.85 in the early hours of Monday (UTC). It is currently printing a doji and may end the day with significant gains.

The 4-hour chart offers more insight into how the price trended during this period. During the first session, it dropped from $2 to its current low, shedding almost 7%. Nonetheless, recovery began shortly after, allowing the asset to pare its losses.

The altcoin has erased all its losses at the time of writing is up slightly. However, investors continue to question the reason for the sharp decline. Geopolitical tensions between the US and the EU, along with threats of tariffs, are the main causes.

Nonetheless, a previous analysis highlighted the current decline, citing indicators on the 1-day and 1-week charts. It also mentioned ETFs as another big catalyst that could cause prices to plummet.

The recent decline confirms the reading from the highlighted indicators. However, the write-up suggested that investors should closely watch price action over the next two weeks.

While the article highlighted several catalysts and metrics, a recent report has added to the concerns. Glassnode noted that investors are back to accumulating. A clear indication of their action was the sharp recovery in XRP on Monday.

However, a group of buyers has caught attention. Traders who have been active between 1 week and 1 month are leading the buyback. Nonetheless, they are stacking up below the cost basis of 6-month to 12-month holders.

What Could Go Wrong With XRP?

At face value, the move to accumulate below the CB would strengthen and increase demand concentration at the mark, thereby making it a tough support. However, it would also mean that when the 6M-12M cohort sells and drives the price below its cost basis, the short-term cohort will panic-sell, exacerbating the decline.

Additionally, Glassnode stated that the current market structure closely mimics that seen in February 2022. The firm also added that as the structure persists, “psychological pressure on top buyers continues to build over time.”

Examining how prices reacted in 2022 would offer a better perspective on the possible implications of this structure.

A closer look at the chart above shows that the altcoin saw a significant increase during the first two weeks of February, only to retrace afterward. As in Feb 2022, XRP had a strong start to January and surged during the second week, but failed to hold the peak.

After prices retraced in the second month of 2022, the asset resumed its uptrend in March, only to revive a false sense of security before plummeting the next month. If the current trend continues, XRP may be heading for another massive downtrend as it did in 2022.

Regarding when the downtrend would start, using the exact model as Feb 2022, it will start in March. This means the asset will experience another month of notable increases before retracing.

However, it is worth noting that price may not play out exactly as in 2022. Nonetheless, if the asset continues in the same structure, “psychological pressure on top buyers continues to build over time.”

With accumulation in full swing, it remains to be seen if XRP will overcome the growing bearish sentiment across the market. In either case, the bollinger band recently flipped bullish on the 1-day chart.

The altcoin bounced off the lower band a few hours ago. As the principle guarding the indicator, an uptrend may be at hand.

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