The market is currently flashing warning signs, as a bearish technical pattern emerges on XRP’s weekly chart. This pattern coincides with broader macroeconomic concerns, including anticipated U.S. tariffs in April, which could further affect market sentiment.
XRP’s Descending Triangle Pattern
Since its late 2024 rally, XRP's price chart has formed a descending triangle pattern on its weekly chart. This pattern consists of a flat support level and a downward-sloping resistance line. When a descending triangle forms after a strong uptrend, it is typically considered a bearish reversal indicator.
This pattern suggests that if XRP's price breaks below the flat support level, it could fall as much as the maximum height of the triangle. As of March 28, XRP was testing the support level, and a breakdown could drive the price down to around $1.32 by April, representing a 40% drop from current levels. Currently XRP Price trading at $2.21.
Peter Brandt’s Warning and Potential Rebound
Veteran trader Peter Brandt has echoed similar concerns, predicting a possible drop to as low as $1.07 due to a “textbook” head-and-shoulders pattern forming on the daily chart. However, if XRP manages to rebound from the support level, it could push towards the upper trendline at around $2.55. A breakout above this resistance could invalidate the bearish patterns and potentially send the price back up toward its previous high of $3.35.
Impact of Trump's Tariffs on XRP’s Sell-off
Beyond technical patterns, macroeconomic factors are also influencing the market. The broader market is becoming increasingly cautious in anticipation of President Donald Trump’s 25% tariffs on auto imports, set to take effect on April 3. These tariffs are expected to raise prices for U.S. manufacturers and consumers, further stressing inflation concerns.
The February 2025 U.S. Consumer Price Index (CPI) report showed a 0.2% increase in prices month-over-month. St. Louis Federal Reserve President Alberto Musalem has estimated that these tariffs could add around 1.2 percentage points to inflation—0.5 percentage points from direct effects and 0.7 percentage points from indirect effects.
Federal Reserve and Speculative Markets
As a result of these macroeconomic pressures, the probability of the Federal Reserve cutting interest rates has declined. According to the CME FedWatch Tool, the likelihood of a rate cut to a target range of 400-425 basis points in June has fallen to 55.7% as of March 28, down from 67.3% a week earlier.
A delayed rate cut could reduce the flow of capital into speculative markets, which typically benefit from lower interest rates and a "risk-on" environment. This scenario could stall the momentum for XRP and other digital assets that thrive under these conditions.
With technical patterns suggesting a potential 40% drop for XRP, and macroeconomic factors adding further pressure, investors should proceed cautiously. However, if XRP can break out of its current resistance, the market could see a reversal. As always, every investment carries risk, and readers should conduct thorough research before making any financial decisions.
With a possible 40% decline predicted due to bearish patterns and looming macroeconomic factors, XRP faces a challenging road ahead. Yet, a breakout could offer hope, pushing the price toward $3.35. Investors should stay alert and assess risks carefully before making decisions.
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