While the XRP price is already down -42% since its peak at $3.40 on January 16, renowned technical trader Josh Olszewicz (@CarpeNoctom) warns that the next leg downward may be imminent. Sharing his daily chart analysis on X, Olszewicz writes, “1D XRP: H&S + bearish kumo breakout watch,” signaling that two significant technical developments could push XRP prices lower in the near future.
Is XRP Poised To Crash Towards $1.24?
The mention of an “H&S” refers to the Head and Shoulders pattern, a well-known reversal formation in technical analysis. The pattern typically emerges after a substantial upward rally and includes three successive peaks, with the middle peak (the “head”) higher than the flanking peaks (the “shoulders”).
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In the case of XRP, Olszewicz’s chart suggests that the central head formed around $3.40 in mid-January, while the shoulders appear to be topping out between $2.83–$2.90. Technical analysts pay close attention to the “neckline,” which generally runs along a key support level beneath the peaks. When the price decisively breaks below this neckline, it is viewed as confirmation that selling pressure has overwhelmed buying interest, often leading to further downside.
Olszewicz’s comment also highlights the phrase “bearish kumo breakout,” referencing the Ichimoku Cloud system, another prominent tool for charting and forecasting price momentum. Ichimoku Cloud analysis projects multiple moving averages forward on the chart and creates a “cloud” of support or resistance levels.
A bearish kumo breakout arises when the price action clearly drops below the Ichimoku Cloud and the future cloud itself shifts in a way that indicates weaker bullish momentum. The core idea is that once an asset’s price slips under the cloud, a further decline becomes more likely, since the cloud that previously acted as support is no longer providing a cushion.
From the chart Olszewicz provided, the current price action around $2.18 sits just above a conspicuous support area in the $2.00 region, which he interprets as the neckline for the Head and Shoulders pattern. If that zone gives way, bears could potentially dominate the market, with Fibonacci levels marked on the chart pointing to a possible first stop near $1.94, followed by an even steeper target.
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The chart appears to highlight a 161.8% Fibonacci extension level at around $1.24, which could come into play if selling accelerates. The presence of these Fibonacci levels does not guarantee a breakdown to those lows, but notably, a typical breakdown from the h&s pattern could spell even more doom.
The profit target for the pattern is generally the price difference between the head and the low point of either shoulder. This difference is then subtracted from the neckline which could position the XRP price even below $1.00.
Despite the stark warning about an impending “massive” price crash, it is crucial to note that Olszewicz’s commentary, “1D XRP: H&S + bearish kumo breakout watch,” should be viewed as an alert for traders rather than an irreversible prediction. Technical setups can fail if bullish momentum returns or if broader market fundamentals shift, but for now the entire crypto market seems driven by extreme fear.
At press time, XRP traded at $2.03
Featured image created with DALL.E, chart from TradingView.com
