Bitcoin's Bull Run May Be Short-Lived as Bearish Pattern Emerges

XRP Price at Risk of 50% Correction if Bearish Trading Pattern Holds, Peter Brandt

The price of Ripple's XRP token is at risk of a 50% correction if a bearish trading pattern continues to hold, according to market analyst Peter Brandt.

Brandt, a renowned technical analyst and founder of Factor LLC, warned that the current price action of XRP is reminiscent of a pattern that has historically led to significant declines in price.

In a tweet, Brandt noted that XRP's price has been trading in a narrow range since early October, but the token's recent failure to break above a key resistance level has raised concerns about a potential correction.

"XRP's recent failure to clear $0.55 has led to a bearish engulfing pattern, which historically has been a strong predictor of price declines," Brandt tweeted. "If this pattern holds, a 50% correction is possible."

A bearish engulfing pattern occurs when a candlestick forms with a lower high and a higher low than the previous period, indicating a shift from bullish to bearish sentiment.

Brandt's warning comes as XRP's price has been struggling to gain momentum in recent weeks, despite the token's strong performance in the first half of the year. XRP's price has fallen by around 20% since its peak in September, and the token's market capitalization has dropped to around $13.5 billion.

The bearish sentiment in the XRP market has been fueled by concerns about the token's adoption and use cases, as well as the ongoing legal battles facing Ripple's parent company, Ripple Labs.

Despite the bearish outlook, some analysts remain optimistic about XRP's long-term potential. According to a recent report by Bloomberg, XRP's decentralized exchange (DEX) has seen significant growth in recent months, with the token's trading volume on the platform increasing by over 500% in the past year.

The DEX, which was launched in June, allows users to trade XRP and other cryptocurrencies in a decentralized manner, without the need for intermediaries like exchanges. The platform's growth has been driven by the increasing popularity of decentralized finance (DeFi) applications, which rely on XRP's fast and low-cost transaction capabilities.