XRP | Head and Shoulders Pattern.
Head: $3.4.
Left Shoulder: $2.9.
Right Shoulder: $3.0.
The Neckline: $2.00.
Components of the Pattern:
Left Shoulder: Represents the first peak at $2.9, where the price rose and then retreated to the neckline at around $2.00.
Head: The highest peak at $3.4, the topmost point of the pattern, followed by a retreat to the neckline at $2.00.
Right Shoulder: The second peak at $3.0, lower than the head, followed by a retreat to the neckline at $2.00.
Neckline: Remains at approximately $2.00, a horizontal support level connecting the lows after the left shoulder and the head and the right Shoulder.
Implications of the Pattern:
The pattern remains a bearish reversal pattern, indicating a weakening of bullish momentum after reaching the head at $3.4.
If the price breaks below the neckline ($2.00) with increased volume, this confirms the pattern’s completion and signals a significant decline.
Current Situation (March 2025):
The current price ($2.2) is very close to the neckline ($2.00), making a breakout likely in the coming days.
The potential crossover of the moving averages (blue and red lines) supports the possibility of a trend change.
NOTE:
If the price bounces off the neckline ($2.00) with increased volume, this invalidates the pattern.
In this case, the price might attempt to retest resistance at $3.0 (right shoulder peak) or even $3.4 (head peak).
Conclusion:
The Head and Shoulders pattern: indicates a strong potential for a bearish reversal, if the price breaks below the neckline ($2.00). Confirmation of the breakout with increased volume is essential, while considering fundamental news that might influence the market.
