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Scott Melker, the Wolf of All Streets, recently revealed that $XRP has dropped into the air pocket, which explains why it now records steeper declines.
His recent commentary comes on the back of the latest wave of selling pressure that hit the market. Notably, this pressure led to $889 million in realized losses for Bitcoin ($BTC), marking its second-largest capitulation event since 2022, as prices dropped to $66,000. $BTC has since collapsed further below $65,000, bringing down the rest of the market with it.
As a result, $XRP has seen similar declines to the $1.2 region, slipping into the air pocket on the weekly chart. For context, this air pocket represents the downside area below the horizontal support trendline at $1.61, where there is minimal buying support. According to Melker, $XRP’s drop to this area explains why it sees steeper declines than other assets.
Key Points
- The crypto market has witnessed yet another wave of selling pressure, pushing Bitcoin ($BTC) and other assets to new lows.
- This latest selling pressure also triggered an $XRP collapse to $1.2, leading to a drop below its 1-week horizontal support trendline.
- The area beneath this support trendline has little buying support, representing $XRP’s air pocket.
- Dips toward an air pocket often trigger larger declines due to little buying pressure in the area, and this explains $XRP’s further downward push.
- While $XRP may eye its next support around the 200W MA at $1.1, this moving average has recently failed to protect other altcoins.
Latest Selling Wave Leads to Large Declines
The latest selling wave has now put a dent in investor confidence, dashing any residual hopes of an imminent recovery in the near future. Specifically, this collapse has pushed $BTC below the $65,000 mark for the first time since October 2024, as it has dropped nearly 26% this year so far.
The global crypto market cap has now lost $430 billion over the past six days, and $XRP has contributed some of the largest losses to this decline, with a 30.56% decline year-to-date. While it has held up better than Ethereum (-35%) in the same timeframe, $XRP has collapsed harder than BNB (-28%) and Cardano (-24%).
$XRP Has Slipped into the Air Pocket
Scott Melker, the Wolf of All Streets, stressed that $XRP’s steeper declines have materialized due to the asset’s drop into an air pocket below the horizontal support trendline at $1.61 on the weekly chart. For context, this trendline acted as a solid support level during the April 2025 collapse and the 10/10 crash.
When $XRP also dropped from the $1.93 high on Jan. 28, this trendline presented a cushion against further declines as prices hit the $1.6 to $1.5 region. Now, the latest selling wave has breached this support, leading to the air pocket below it, as $XRP enters dangerous territory.
For the uninitiated, an air pocket refers to a price zone on the order book that has very little buying interest. As a result of this minimal buying pressure, the price has no major support to slow down the selling pressure, leading to rapid price declines. Melker revealed that $XRP’s descent into the air pocket explains why it has dropped harder than most other altcoins.
Where is $XRP’s Next Support?
Meanwhile, the Wolf of All Streets called attention to the 200-week moving average (MA) at $1.1, which represents the next noticeable support area below the air pocket. However, the market analyst pointed out that this moving average failed to provide sufficient support for other altcoins and has so far given way to bearish pressure.
For instance, Ethereum, which has declined 35% this year, dropped below its 200W MA at $2,456 last week, even before the latest selling wave. Moreover, Solana, with a 36% drop year-to-date, also breached below its 200W MA at $103 last week. As a result, Melker has little faith in this moving average.
He suggested that most of the potent support levels for $XRP at this point reside below the $1 psychological level. It bears mentioning that $XRP has not traded below this level since the November 2024 rally. The asset would need to drop by a further 21.8% to reach the $1 price.