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The close of $XRP's May monthly candle has officially shattered investor optimism, unlocking a classic bearish setup just as summer begins. The technical compression of Bollinger Bands on $XRP's higher time frames from TradingView, combined with on-chain data, indicates that in the coming weeks the token's price risks falling below the psychological threshold of $1.
The main trigger behind the worsening outlook was $XRP closing below the middle line of the Bollinger Bands on the monthly chart, which now acts as resistance at $2.0710. According to the rules of the indicator, the longer the price stays below this level, the more open the path becomes toward a test of the lower band, which is located at $0.9671.
The situation is worsened by the relative strength index (RSI). It fell to 44.36 and confirmed a bearish divergence, which points to clear weakness among buyers.
The weekly time frame only confirms this negative trend as the three-month spring consolidation ended with quotes breaking downward toward $1.3033. The price is now literally pressing against the lower Bollinger Band at $1.1810 on the weekly chart. In technical analysis, this kind of pressure after a long period of calm usually signals the start of a strong impulsive decline.
Inside the massive $XRP retail capitulation
The current breakdown was reinforced by panic within the network itself. Santiment analysts recorded a rapid liquidity cycle at the end of May, as an inflow of 22.8 million $XRP was quickly replaced by an outflow of 25.24 million $XRP.
Market participants were massively getting rid of assets at the lowest prices in the last 15 weeks, which caused $XRP's average cost basis to collapse to the lows of December 2020. As a result, the average active player recorded about a 47% net loss over the past month.
Historical seasonality also points to a difficult period, as June has traditionally been a negative month for $XRP, with an average decline of 4.87% and a median drop of 8.20%.
However, the statistics also indicate a high probability of strong volatility during the summer, since historically depressed June often gives way to a powerful green July with an average gain of 10.2%, after which the market freezes again in a flat range in August.
The only foothold for bulls right now is the extreme level of fear, where a local bottom often forms. If large capital decides to buy up the volumes of panicking retail investors, $XRP may still show a technical rebound toward $1.37 and $1.40.
Otherwise, Bollinger Bands will continue dragging price toward the final medium-term target at $0.9671.