A descending broadening wedge pattern often appears during late-stage accumulation phases, with expanding volatility constrained within downward-sloping boundaries rather than signaling outright weakness.
“This is NOT a random formation,” the analyst wrote. “Historically, these structures often produce final capitulation THEN violent expansion.”
According to Egrag Crypto’s chart, the formation carries a 57% probability of upside resolution against a 43% probability of further downside. Current price action supports a downward move. This is why EGRAG described the current phase as short-term bearish compression, even though the larger macro structure is still bullish unless the structure breaks fully.
The most important downside level on the chart is $1.11. Egrag noted this as critical support, and it acts as the boundary between normal volatility inside the structure and a more dangerous breakdown. XRP is currently trading around $1.36 and below moving averages, including the EMA20 at $1.391, the EMA50 at $1.404, and the EMA200 at $1.684; the distance to that support level is not comfortable.
A loss of $1.11 would place XRP in a weaker technical position and lead to an extreme 70% flush scenario to $0.32. That level is not the analyst’s base case, but it shows the type of liquidity sweep that can happen if the descending broadening wedge breaks in the wrong direction.
The bullish side of the analysis will not begin until XRP confirms a move above $3. The analyst also noted that a weekly or monthly reclaim above $2.65 to $3 would change everything, because that would mean XRP has broken back above the upper resistance area that has contained the broadening wedge.
Featured image from Getty Images, chart from TradingView
