XRP has faced recent price challenges, with a 6% drop over the past week shaking short-term sentiment. Despite these setbacks, technical signals and on-chain data suggest there may still be a strong opportunity for a rally. Here’s how these critical factors could align to trigger a 33% price surge for XRP.
The Technical Setup: Inverse Head-and-Shoulders Pattern
On the daily chart, XRP is showing signs of forming an inverse head-and-shoulders pattern, a classic indicator of a potential trend reversal. However, to fully unlock this bullish structure, XRP must first regain the 100-day exponential moving average (EMA)—a crucial hurdle that has historically marked turning points for the cryptocurrency’s price action.
In September, reclaiming the 100-day EMA led to a 12% rally, quickly followed by another 16% move. Currently, this barrier sits at $2.24. A successful close above this level could open the doors to the $2.48–$2.52 price zone, signaling the full activation of the bullish pattern and paving the way for an anticipated 33% climb.
Key Levels to Watch
- A close above $2.24 confirms bullish momentum.
- Breaking into the $2.48–$2.52 zone activates the rally potential.
- On the downside, losing $1.84 weakens the setup, and dropping below $1.77 would invalidate it entirely.
On-Chain Insights: Whales and Long-Term Holders
Data suggests that XRP is experiencing deliberate accumulation from whale investors and long-term holder addresses:
- Whales holding 10 million–100 million XRP have increased their collective holdings by $60 million worth of tokens.
- Smaller whales controlling 1 million–10 million XRP have added nearly $100 million worth to their wallets.
Similarly, long-term holders, defined as wallets retaining XRP for over 155 days, have noticeably increased their positions. Between January 16–18, their holdings grew by 5.2%, equivalent to roughly 11.69 million XRP. This aligns with the whales’ earlier accumulation, hinting at planned, strategic buying rather than reactionary dip-chasing.
Short Squeeze Potential in Derivatives Markets
The derivatives market adds another layer of intrigue. Short positions dominate current XRP perpetual futures markets, with 95% of leverage skewed toward short trades. This imbalance creates the potential for a short squeeze. Even a modest price uptick could trigger forced closures of these positions, amplifying XRP’s upward momentum.
Get the Look: Stay Ahead in Crypto Investing
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The Bottom Line
XRP is at a critical juncture, with its price setup hinting at a possible reversal if key technical and psychological price levels are reclaimed. Coupled with strong on-chain activity and the potential for a short squeeze, the possibility of a 33% rally is alive—provided XRP can mimic its September performance.
Whether you’re a seasoned investor or new to crypto, monitoring these levels will be crucial in the coming days. Stay informed and make data-driven decisions to optimize your strategy.
