Could XRP Fall Below $2 By March 2025?

XRP has experienced a significant correction, plummeting nearly 30% in the past month and remaining below the $3 mark. The Directional Movement Index (DMI) indicates a firm downtrend, with the Average Directional Index (ADX) surpassing 35, illustrating heightened bearish momentum.

However, a potential turnaround may arise if the SEC decides to drop its lawsuit against XRP, likely igniting a rally toward important resistance levels.

XRP’s DMI Signals Uncertain Future

Currently, XRP’s DMI shows its ADX at 36.98, a notable increase from 15.89 just four days prior. The ADX serves as a gauge of trend strength, not direction. Values above 25 suggest strong trending forces, while those below 20 indicate weak market activity.

The sharp rise of XRP’s ADX above 35 points to an intensifying downtrend, as market participants seem more inclined to follow the current bearish pattern.

XRP's +DI (Positive Directional Indicator) has fallen to 11.4 from a recent high of 15.1, indicating waning bullish momentum. Correspondingly, the -DI (Negative Directional Indicator) has decreased to 21.6, down from 37.2 on February 2, reflecting diminishing bearish pressure. Yet, the -DI continues to remain over the +DI, affirming the persistence of the downtrend.

Increasing Active Addresses Suggesting Renewed Interest

The 7-day metric of XRP Active Addresses dropped from 407,000 on January 20 to around 186,000 by February 19, marking the lowest levels since November 2024. This decline signifies reduced network activity and bearish sentiment.

Recently, XRP Active Addresses have rebounded, climbing to 236,000—an increase of 26.8% over the past week. This recovery points towards growing user activity and renewed interest in the network. Historically, such increases in active addresses can precede price recoveries, suggesting a potential rise in demand.

The SEC Lawsuit and Its Impact on XRP’s Future

XRP's Exponential Moving Average (EMA) lines currently depict a bearish setup, where short-term lines fall beneath long-term ones. Prices have been consistently under $3 since February 1.

This alignment indicates potential continuation of the downtrend, with key support levels at $2.15 and $2.06 coming into play. A breakdown below these levels could push XRP down towards $1.77, marking a fall below $2 for the first time since November 2024.

Nevertheless, a trend reversal could be in sight, particularly if the SEC withdraws its lawsuit against XRP in March. The SEC's recent decisions to dismiss similar cases against other companies like Gemini and Coinbase signify a possible shift in regulatory dynamics.

If the lawsuit against XRP is dropped, an upward trend may ensue, with XRP likely to test resistance at $2.36 and $2.52. Breaking through these levels could pave the way for a rise to $2.71, potentially reversing the current bearish outlook.