The $1.40 level, which had been a point of defense for buyers over the past few weeks, was finally breached by XRP. Notably, this wasn't a gradual decline but rather a high-volume push that cleared this critical level. Once such support is lost, it often does not quickly revert; instead, it tends to flip roles, which is the current test.
Several factors have contributed to this scenario: Bitcoin's dominance has been moving towards 60%, signifying a rotation away from altcoins and thus limiting the demand for XRP. Furthermore, the multi-month triangle structure, which had been compressing prices, finally resolved but in a downward direction, contrary to the anticipated upside expansion. Key points to consider include the sharp drop from $1.44 to $1.39, a clean break through the $1.40 support zone driven by increased participation rather than thin liquidity, and the current stabilization of price just below the breakdown level within a tight $1.39–$1.40 range.
Technically, the structural shift with $1.40 transitioning from support to resistance unless quickly reclaimed, combined with the volume expansion into the breakdown confirming genuine selling pressure, and the resolution of the triangle pattern to the downside, removing compression support, are critical. While short-term bounces are appearing, they lack the strength to reverse the move at this point.
For traders, the key levels to watch include $1.40 as the pivot; reclaiming this with volume could suggest the breakdown was a false move. The next downside level is $1.37, and losing this could pave the way for a move towards deeper support near $1.31. If the price continues to hold below $1.40, sellers will remain in control, and rallies are likely to be met with selling pressure.