XRP price is down today, akin to declines witnessed elsewhere in the cryptocurrency market.
XRP underperforms crypto market
XRP price dropped nearly 1.5% to $0.50 on Sep. 5, underperforming the broader crypto market, which fell about 1% in the same period. The drop coincided with the U.S. dollar index's (DXY) rise. The dollar's correlation with cryptocurrencies has been consistently negative since July.
XRP's decline appears to be part of a sideways consolidation trend. Traders are buying and flipping XRP for a profit as soon as the price increases. Thus, they have kept its price trapped inside a narrow trading range of $0.49-0.51.
XRP decline precedes potential whale dump
One of the possible reasons behind increased XRP sell-pressure is likely large whale transfers.
For instance, on Sep. 3, an anonymous address sent 29.7 million XRP tokens worth around $15 million to the BitStamp exchange. The amount isn't that large to affect XRP market trends, but its sender is the 98th richest XRP holder — a whale, according to data tracked by CoinCarp.
A look through XRP's supply among whale addresses further indicates distribution among most cohorts. For instance, the XRP supply held by entities with a balance between 1 million and 10 million tokens (brown) has declined since Sep. 3.
Similarly, XRP supply held by whales with a balance between 100 million and 1 billion tokens (green) has dropped in the same period. Interestingly, the 10 million-100 million XRP balance cohort (black) has absorbed the supply from the 100 million-1 billion balance cohort.
XRP price analysis for September
From a technical standpoint, XRP appears to have entered the breakdown stage of its prevailing bear pennant pattern.
A bear pennant is a bearish continuation pattern, characterized by the price consolidating inside a range defined by a falling trendline resistance and a rising trendline support. It resolves after the price breaks below the lower trendline and falls by as much as the previous decline height.
As a result of this technical analysis rule, XRP price risks falling toward $0.40 in September 2023, about 20% lower than current price levels.
Conversely, a close above XRP's 200-day exponential moving average (200-day EMA; the blue wave) near $0.52 may invalidate or delay the bear pennant breakdown. Instead, the price is poised to rise toward the pennant's upper trendline near $0.54 or the 50-day EMA (the red wave) near $0.56.
This bullish scenario can result in a 7-15% price rally in September from current price levels.
