XRP’s recent rally to seven-year highs has sparked renewed optimism among investors. However, the cryptocurrency is now showing signs of topping out, reminiscent of its 2018 correction. While a bullish breakout remains a possibility, technical indicators suggest a potential decline to key support levels.
XRP Price Drops Amid Market Uncertainty
The price of XRP has fallen by 4% in the past 24 hours, reaching as low as $3.02 on 29 January. This decline follows a recent surge that saw the token hit a local high of $3.40. Investors are now closely monitoring price movements to determine whether XRP will continue its descent or regain bullish momentum.
Symmetrical Triangle Breakdown Signals Potential Drop to $2.50
A critical pattern forming on XRP’s chart suggests that further downsides could be ahead. The cryptocurrency is consolidating within a symmetrical triangle, a pattern characterized by converging trendlines connecting higher lows and lower highs. These formations are typically neutral and can result in breakouts in either direction.
XRP in addresses with at least 1M balance. Source: CryptoQuant
Currently, XRP is trading near the lower boundary of this triangle. If the price breaks below this support level, it could lead to a deeper correction. Technical indicators suggest that a breach of the $3.00 support level could trigger a drop towards the 50-day exponential moving average (EMA) at $2.57, with a further downside target at $2.50. This would represent an 18% decline from current price levels.
Conversely, a breakout above the upper trendline of the triangle could push XRP towards $3.75. This target is derived by adding the triangle’s maximum height to the breakout point at approximately $3.20. However, the current market sentiment leans bearish, driven by declining investor participation.
Declining Active Addresses Raise Concerns
A key metric indicating market sentiment is the number of active XRP wallets, which has seen a significant decline. On 2 December 2024, active XRP addresses reached a three-year high of 108,771. However, by 28 January 2025, this number had fallen sharply to 40,292—a drop of nearly 63% in under two months. Over the past 10 days alone, active addresses have decreased by 39%, coinciding with a 10% price drop.
This data suggests that investors have been taking profits following XRP’s rapid rally. If this trend continues, the selling pressure could drive the price lower before a potential recovery.
Bull Flag Pattern Suggests Possible Upside
Despite the recent pullback, XRP remains within a bullish continuation pattern known as a bull flag. This pattern typically indicates a temporary consolidation before the asset resumes its upward trend.
XRP/USD daily price chart. Source: TradingView
XRP formed this pattern following its surge from $2.27 to $3.40 between 10 and 16 January. Since then, the price has been consolidating within a descending parallel channel, testing key support levels. The current recovery is approaching a critical resistance level at $3.30. A decisive breakout above this mark could reignite bullish momentum, pushing XRP towards its next upside target of $4.60—an impressive 52% increase from current levels.
Market Outlook: Cautious Optimism
While XRP faces short-term downside risks, the long-term outlook remains uncertain. If the cryptocurrency can hold key support levels and break above its resistance zones, a renewed rally could be on the horizon. However, continued selling pressure and declining network activity may weigh on its price in the near term.
Traders and investors will be watching closely to see whether XRP can sustain its bullish momentum or if a further correction is imminent.
