XRP price has gained nearly 11% over the past seven days, recovering from its early March lows. However, despite this short-term strength, the token remains down roughly 16% year-to-date. This shows that the broader trend has not fully turned bullish yet.
Now, after testing the $1.60 level, XRP appears to be entering a consolidation phase that could define its next move.
XRP Forms Cup at $1.60 as Volume Decline Signals Consolidation Phase
XRP’s recent price action shows a rounded recovery structure forming since early February, creating what appears to be a cup pattern on the daily chart. The structure completed its rim near the $1.60 zone, where the price faced immediate selling pressure, forming a long upper wick.
This rejection highlights $1.60 as a strong resistance level. It also suggests that some traders began locking in profits after the recent rally.
Volume behavior further supports this shift. During the move toward $1.60, trading activity increased, reflected in multiple rising green volume bars. However, once XRP reached resistance, volume began to decline noticeably. This reduction in participation (and with sellers in play) often signals a pause in momentum rather than a continuation, aligning with the early stages of a potential handle formation.
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At the same time, XRP continues to trade around key moving averages. The 50-day Exponential Moving Average (EMA), currently near $1.50, and the 20-day EMA, near $1.42, now act as immediate support levels. The EMA is a trend indicator that gives more weight to recent price movements, helping identify momentum shifts.
For the structure to remain intact, XRP must hold above these levels during consolidation. A sustained move below $1.42 would weaken the setup and suggest that the pattern may fail.
To understand whether this consolidation reflects a healthy pause or growing weakness, on-chain and derivatives data offer additional insight.
Mild Selling and Falling Leverage Suggest Cooling, Not Breakdown
On-chain data shows a slight increase in XRP exchange reserves during the recent rally. Reserves rose from approximately 2.77 billion XRP to around 2.80 billion XRP, marking a modest increase of about 0.9%.
This mild inflow suggests that some holders moved tokens to exchanges to take profits near the $1.60 resistance. The timing of this increase aligns with the long upper wick observed on March 17 on the daily chart, reinforcing the idea of localized selling pressure rather than broad distribution.
Note: The long wick on Coinbase’s daily chart and the rise in Binance’s XRP exchange reserves suggest a similar influx of sellers across exchanges.
Interestingly, current reserve levels are comparable to those seen around mid-November, when XRP experienced a short-term pullback of roughly 12% within a few days.
At the same time, derivatives data show that leverage is cooling rather than building. Open interest, which tracks the total value of active futures contracts, declined from approximately $975 million to $953 million.
Meanwhile, funding rates, which indicate whether long or short traders dominate the market, fell sharply from around 0.0015 to 0.00014 (90% dip), representing a significant reduction while still remaining positive.
This combination is important. Falling open interest suggests that traders are closing positions, while lower funding rates indicate reduced bullish aggressiveness. However, since funding remains positive and no major increase in short positions is visible, the data points to a cooling of long positions rather than a shift to bearish sentiment.
Together, these signals suggest that XRP is undergoing a reset in momentum, a condition that often supports consolidation phases rather than immediate trend reversals.
XRP Price Levels: Break Above $1.60 Could Unlock 30% Move
The $1.60–$1.61 zone now stands as the most critical level for XRP. This area not only marks the resistance formed at the cup’s rim but also aligns with the 0.618 Fibonacci level, strengthening its importance.
If XRP successfully breaks and holds above this range, it could confirm the continuation of the structure. In that case, the next upside target appears near $1.70, followed by a potential extension toward $2.08, representing a roughly 30% move from current levels.
However, downside risks remain if the consolidation weakens.
The first technical support sits near $1.54, followed by the 50-day EMA line. Below that, the $1.40 level, closer to the 20-day EMA highlighted earlier, becomes the key level to watch. A sustained drop below this zone would weaken the structure and increase the risk of a deeper correction.
If XRP falls below $1.40, the handle formation would likely fail. A further decline toward $1.27 would invalidate the broader setup entirely.
For now, XRP’s price action reflects a transition rather than a clear directional move. The rally has paused, but the bullish structure remains intact.
The post XRP Price Stalls at $1.60, but One Bullish Pattern Keeps Upside in Play appeared first on BeInCrypto.
