Thomas Daniels
A critical technical indicator has reappeared for XRP in July, historically preceding significant price declines. As the daily Stochastic RSI enters overbought territory, market analysts are warning of a possible correction—potentially as deep as 70%—should bearish patterns play out.
In 2025, XRP has repeatedly fallen by an average of 25% following this same signal. With technical indicators aligning once more, market participants are weighing the probabilities of a near-term downturn against the potential for bullish breakouts.
Historical RSI Signal Reappears
The Stochastic Relative Strength Index (RSI)—a momentum oscillator tracking an asset’s RSI relative to its range—crossed into the overbought zone (above 80) on June 28 and has remained elevated since. Historically, this signal has marked local tops for XRP.
So far in 2025, each time XRP’s daily Stochastic RSI has reached this threshold, the cryptocurrency has declined between 12% and 45%, with an average drop of over 25%. With the same conditions emerging again, analysts suggest a heightened probability of a downside move in the coming days or weeks.
Chart Patterns Signal Deeper Risk
Beyond momentum indicators, XRP’s technical chart structure points to potential vulnerability:
- Descending Triangle Breakdown
The formation of a descending triangle pattern after XRP’s recent rally is a bearish continuation signal. A breakdown from this formation could push prices toward $1.14, representing a nearly 50% drawdown from current levels. - Long-Term Support Test and Fair Value Gap
Crypto analyst Xanrox highlights a larger risk scenario, pointing to a multi-year ascending triangle dating back to 2017. During XRP’s parabolic rise earlier this year, the asset left behind a Fair Value Gap (FVG)—a technical imbalance typically revisited after volatile moves. Xanrox forecasts a return to the triangle’s lower boundary near $0.60, implying a potential 70% retracement.
Diverging Views: Bullish Analysts Hold the Line
Despite the bearish indicators, several analysts remain optimistic about XRP’s long-term outlook.
- Mikybull Crypto projects a breakout from a symmetrical triangle, targeting $3.70 by September.
- XForceGlobal suggests a broader rally fueled by Fibonacci extension levels, with upside potential reaching between $8 and $27.
- Other bullish setups include a falling wedge pattern and signs of whale accumulation, with consensus targets in the $3.20 range.
Market Outlook: Volatility Ahead
XRP’s technical landscape paints a bifurcated picture. On one hand, the reappearance of a historically bearish Stochastic RSI signal and descending triangle breakdown raise alarms. On the other, bullish formations and strategic accumulation by large holders present a compelling counter-narrative.
Investors should remain cautious and closely monitor XRP’s price behavior near current support and resistance levels. Should bearish patterns hold, targets of $1.14 and $0.60 may come into play. Conversely, successful bullish breakouts could propel XRP toward the $3–$4 range and possibly higher if momentum sustains.
