XRP price risks repeating 2022 crash as new buyers go underwater

XRP is currently facing significant downside pressure, fueled by persistent selling from recent market entrants who are now holding positions ‘underwater.’ This situation, characterized by declining investor conviction and failure to sustain key resistance breaks, raises concerns that the asset could be poised to repeat the steep price declines witnessed in late 2022.

Following the partial legal victory against the SEC in July 2023, XRP experienced a brief surge, but failed to capitalize on the momentum, remaining largely range-bound between $0.50 and $0.75. On-chain data indicates that a substantial cohort of buyers who entered the market between Q3 2023 and Q1 2024 are holding tokens purchased significantly above the current market price. This cohort represents a large pool of latent selling pressure, as these investors are likely to liquidate their holdings upon reaching their break-even point, thereby suppressing any attempted upward rally.

The current technical setup eerily resembles the pre-crash conditions of 2022. During that period, XRP suffered from market apathy and regulatory uncertainty, culminating in a drop toward multi-year lows. Now, the lack of significant bullish catalysts—compounded by the accumulation of underwater positions—suggests that if critical support levels are breached, the resulting panic selling could trigger a steep correction.

Key support zones, particularly around $0.48 and $0.45, are crucial. A decisive break below this level could accelerate the descent, potentially opening the path toward revisiting the $0.35 area, representing a full reversal of the gains accrued since the middle of 2023. Unless major external market inflows or positive developments from Ripple Labs materialize, the technical structure indicates a high probability of extended downside volatility driven by recent buyers attempting to mitigate further losses.

Source: XRP price risks repeating 2022 crash as new buyers go underwater