XRP is facing potential downside risks due to whale activity and bearish technical patterns, raising concerns about its future price action. Recent trading analysis suggests that XRP is threatening a major correction as supply pressure increases following a significant rally.
According to COINOTAG, “Current market sentiment for XRP strongly suggests a test of lower support levels in the near future.”
XRP is at risk of a 25% price drop by early 2025 due to whale selling and the descending triangle formation. This is considered a pessimistic signal.
XRP’s recent performance has been remarkable, with the price up over 300% in just two months. However, current technical indicators suggest that this momentum could be fading. The cryptocurrency is currently trading in a descending triangle formation, which typically heralds price declines. This formation is around a critical horizontal support level with lower highs around $2.10. A drop below this level could trigger significant selling pressure.
As traders begin to monitor a possible drop, a major concern is emerging. Analysts predict that if XRP breaks the support level, the price could drop to around $1.64 in January 2025. This would represent a 25% drop from current trading levels.
Supporting the pessimistic outlook for XRP, on-chain data reveals notable distribution trends among the largest holders. According to the latest data, addresses holding more than 1 million XRP have seen a decrease of 180 million tokens since December. A similar decrease is also observed among addresses holding around 100,000 XRP, indicating a clear shift in sentiment among large holders.
This selling pressure is putting additional downward pressure on the price of XRP, which is down 26% since its local peak at $2.90, while whales are selling their assets, increasing the circulating supply and weakening the demand dynamic, raising fears of a price correction.
The problem is exacerbated by the increasing XRP reserves on leading cryptocurrency exchange Binance. Since mid-December, XRP holdings on the platform have been steadily increasing, and a similar situation has been seen in the past before price corrections. The tokens entering exchange wallets indicate that investors are trying to profit from recent price peaks.
Rising reserves on Binance are reinforcing profit-taking at higher price points, creating pessimistic momentum expectations for XRP. If this trend does not change, there is further downside risk; the market could face a potential 25% drop as it struggles with increasing supply and ongoing whale selling activity.