XRP’s price has surged over 300% in the past two months, reaching $2.10 as of 27 December. However, analysts warn of potential price corrections in early 2025 as bearish indicators emerge. Technical patterns and on-chain data suggest that XRP may erase at least 25% of its recent gains in the near term.
Descending Triangle Signals Potential Breakdown
XRP is currently trading within a descending triangle pattern, a formation that often predicts further price declines. This pattern is characterised by a series of lower highs forming the triangle’s descending trendline, while $2.10 acts as horizontal support.
XRP/USD daily price chart. Source: TradingView
If XRP decisively breaks below the $2.10 support level, a deeper correction may follow. Based on technical analysis, the potential downside target for this breakdown is $1.64, representing a 25% decline from current levels.
Whale Distribution Adds Selling Pressure
On-chain data further bolsters the bearish outlook, highlighting selling activity among major XRP holders, often referred to as “whales.” The supply held by the largest investors—those with balances exceeding 1 million XRP—has decreased by 180 million tokens since the start of December.
Similarly, entities holding balances of at least 100,000 XRP have reduced their holdings by 170 million tokens over the same period. These substantial sell-offs align with XRP’s decline of over 26% from its December high of $2.90.
Such whale activity increases the supply of XRP in circulation, creating downward pressure on its price. The simultaneous price drop and whale selling suggest that the market is currently dominated by profit-taking, with demand failing to match the increase in supply.
Rising XRP Supply on Binance
Another bearish signal comes from the growing reserves of XRP on Binance, the world’s largest cryptocurrency exchange by trading volume. Since mid-December, XRP reserves on Binance have steadily risen. Increased exchange reserves often precede price corrections, as they indicate heightened selling activity.
XRP Ledger Binance exchange reserves. Source: CryptoQuant
This trend reinforces the narrative of profit-taking at local price highs, further contributing to XRP’s bearish momentum. Unless demand significantly increases to absorb the growing supply, XRP prices may continue to face downside risks.
Outlook for Early 2025
In summary, XRP’s recent price action shows warning signs of a potential 25% decline in January 2025, with a target price of $1.64. This outlook is based on a combination of technical patterns, whale distribution trends, and rising exchange reserves.
Investors should closely monitor key support levels and whale activity in the coming weeks, as these factors will likely determine the next phase of XRP’s price trajectory.
