XRP price was trading at $1.33 on April 6, up 3% in the past 24 hours, but remaining inside a developing head and shoulders pattern on the daily chart. The right shoulder is forming, and any rally from here would need to clear a 1.24 billion token supply wall.
The problem is that buying pressure, which usually prompts this type of move, has halved since late March, raising the question of whether the current rebound has enough fuel to absorb the supply or will simply complete the downward pattern.
The right shoulder is forming, and two EMAs are in the way
The daily chart shows a clear head and shoulders structure. The left shoulder formed in late February, the head peaked near $1.60 in mid-March, and the right shoulder is currently developing The price of XRP is standardized About $1.33. The neckline is located near $1.26. A confirmed break below this level would activate a calculated move of approximately 19%.
Before the downtrend can be invalidated, XRP needs to retrace two Exponential Moving Averages (EMAs), which are trend indicators that give more weight to recent price action. The 20-day moving average is at $1.35 and the 50-day moving average is at $1.42. The last clean retracement of the 20-day EMA occurred on March 13, after which prices rose 15.26% and also reclaimed the 50-day EMA.
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A daily close above $1.35 would reclaim the 20-day EMA and provide the first sign of strength in the short term. However, any price peak that remains below the head at $1.60 remains within the head and shoulders structure and risks forming a right shoulder rather than breaking the pattern. Width data reveals exactly where resistance begins (as the shoulder develops) and why it will be difficult to accommodate.
1.2 billion tokens and faint condemnation
Heatmap of the cost distribution, which quantifies the cost XRP supply Last obtained at each price level, they identify two important groups that frame the current setup.
The first lies between $1.31 and $1.32, where there are approximately 719 million XRP on a cost basis. This group acts as the supporting floor for the right shoulder. As long as these holders remain confident and do not sell, the price of XRP maintains its current level.
If this combination starts to spread, the right shoulder will quickly erode and the neckline at $1.26 will be directly threatened.
The second and largest pool ranges between $1.45 and $1.47, and contains approximately 1.24 billion XRP. This is the upper wall that any meaningful height must accommodate. These position holders acquired their positions at higher prices. They may look to exit at or near break-even if the price approaches the cost basis. Pushing 1.24 billion tokens of potential selling pressure requires sustained and aggressive buying.
An exchange’s net position change, which tracks whether tokens move on or off exchanges, reveals whether that purchasing power exists. A negative reading means that more XRP is leaving exchanges than entering, indicating accumulation. The metric peaked at approximately -117 million XRP in late March, indicating strong buying conviction. By April 5, it had fallen to -57 million XRP, a decline of approximately 51%.
The buying pressure that supported the mid-March rally has been cut in half. With 1.24 billion tokens at the top and only half the exchange conviction remaining, the supply wall absorption calculations become exponentially more difficult. If no new purchasing power arrives, the right shoulder may be completed near the $1.45-$1.47 supply range area.
XRP price levels between breakout and collapse
the Daily price chart With technical levels of swing frames completed at each critical level.
The first hurdle is $1.35, which is the 0.236 level that corresponds closely with the 20-day EMA. A daily close above this level would reverse the March 13 retrieval that preceded the 15% rally. Above that, $1.40 and $1.44 are in focus, with $1.48 at 0.618 being the main confirmation. A close above $1.48 means that the $1.24 billion pool of tokens held between $1.45 and $1.47 either did not sell or new demand absorbed its selling pressure.
XRP price will only show real strength above $1.60, which is the head of the pattern. Restoring the head would completely invalidate the head and shoulders pattern and turn the structure from bearish to bullish.
On the downside, failure to reclaim $1.35 leaves the right shoulder intact and $1.26-1.27 remains in immediate danger. A confirmed break below the neckline at $1.26 would activate a measured 19% move projecting a decline towards $1.03.
The daily close above $1.48 confirms that the rally has absorbed the 1.2 billion token barrier. This shifts the price of XRP towards a potential head spin. However, a break below $1.26 confirms this pattern and opens the way towards $1.03.
this post The XRP price rally needs to absorb 1.2 billion tokens, but the purchasing power is disappearing appeared first on BeInCrypto.
