XRP Price Has Formed a Highly Bearish Chart Pattern and Is at Risk of Having a Strong Bearish Breakdown

XRP price has formed a highly bearish chart pattern and is at risk of having a strong bearish breakdown, which could see it hit $1 in the near term.

The price of XRP has formed a highly bearish chart pattern and is at risk of having a strong bearish breakdown, which could see it hit $1 in the near term. On top of this, a popular crypto analyst has warned that the Bitcoin bull cycle has ended, which could hurt altcoins like Ripple. So, what should you do if Ripple price crashes below $1?

CryptoQuant’s Ki Young Ju, a billionaire and the founder of the on-chain analytics firm, said that the bull market was over and that all on-chain metrics were now overbought and in bear-market territory. He explained:

“I’ve been calling for a bull market over the past two years, even when indicators were borderline. Sorry to change my view, but it now looks pretty clear that we’re entering a bear market."

The daily chart below shows that the XRP price is forming a rare bearish pattern known as head and shoulders. This pattern forms when an asset is in an uptrend and is a sign of a bearish reversal. In XRP's case, the head is at the year-to-date high, while the shoulders are at $3 and the neckline is at around $2. In this case, a bearish breakdown will be confirmed if the coin drops below the neckline at $2. A drop below the support at $2 will point to further declines to the next psychological point at $1. This price also coincides with the 78.6% Fibonacci Retracement level. That would be a 55% crash from the current level.

One of the best approaches to handle the XRP price crash is to do dollar cost averaging (DCA). DCA is an approach where an investor buys an asset in small quantities during its downtrend. The main reason for this is to buy more tokens over time, and possibly benefit when the price bounces back. In XRP's case, there are signs that the price will bounce back over time, helped by numerous catalysts.

There are some bullish catalysts that will push the XRP price higher in the long term. For example, the SEC might approve an XRP ETF later this year, especially after Donald Trump's administration began approving Bitcoin ETFs in August. A spot ETF will likely lead to more inflows and boost the price. The SEC has already ended lawsuits against other companies in the crypto industry like Coinbase (NASDAQ:COIN), Gemini, and Kraken. As such, there is a likelihood that the agency will close the Ripple lawsuit later this year.

Ending the lawsuit would be a positive thing for XRP price because it will allow Ripple to ink deals with other companies, link banks, and money transfer firms. XRP price could also benefit from the potential crypto bull run triggered by the Federal Reserve interest rate cuts and end of quantitative tightening.