This week, XRP is showing particularly weak movement among large-cap cryptocurrencies. The price of XRP has fallen about 6% over the past seven days, putting pressure on short-term sentiment.
Even so, this decline does not necessarily mean the end of the movement. Looking at the chart and on-chain data, it is a turning point whether XRP can reproduce a similar pattern as four months ago.
Familiar patterns in the price chart
XRP appears to be forming an inverted head and shoulders pattern on the daily chart. This pattern is a signal of trend reversal, but it has no meaning unless it recovers important levels. Currently, the neckline of this pattern is around $2.52, which is about 28% above the current price.
For the path to rise to open, XRP must first recover above the 100-day exponential moving average (EMA, the sky blue line). The EMA reacts more quickly to trend changes than the simple moving average because it weights recent prices. Historically, this level has been an important decision point for XRP. In September, a recovery above the 100-day EMA resulted in about a 12% increase. A similar recovery at the beginning of the month recorded a 16% increase.
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So far, XRP has not been able to break above the short-term EMA (20-day and 50-day) and was again capped near the 100-day EMA on January 14. However, the recent decline formed a long lower wick, and buyers quickly absorbed the downward pressure. This reaction suggests that demand exists, maintaining a bullish structure for the time being. However, breaking above the EMA wall is a necessary condition.
Whales and holders are moving early, but spot buying alone is insufficient.
On-chain data shows early movements beneath the surface. Whales holding between 10 million to 100 million XRP increased their holdings from approximately 11.14 billion to 11.17 billion XRP. At current prices, this is worth about 6 billion yen.
Whales holding between 1 million and 10 million XRP have acted more aggressively. Their holdings increased from approximately 3.54 billion to 3.59 billion XRP, worth about 10 billion yen. These accumulations began around January 14 and preceded widespread buying by holders. On January 15, some were sold due to a price drop, but the net position since January 14 remains in the positive territory.
General holders have also followed the whales. Since January 16, the net position change of long-term holders has clearly turned positive. This indicator tracks wallets that have held XRP for over 155 days, showing the trends of holders with conviction compared to short-term traders.
On January 16, the holdings of these long-term holders were approximately 223.2 million XRP. By January 18, this increased to about 234.88 million XRP. This is an increase of approximately 11.69 million XRP, equivalent to a 5.2% increase in just two days.
Timing is also important. Whales bought in early during the initial adjustments, while long-term holders entered after January 16. This gradual accumulation suggests planned purchases rather than emotional buying on dips.
The distortion in derivatives is a material factor, influencing the success or failure of XRP's price.
The derivatives market also influences the situation. In the perpetual futures market for XRP, short liquidation leverage is approximately 52 billion yen, while long is about 2.2 billion yen. This means that over 95% of positions are skewed towards shorts.
This imbalance serves as fuel. If a minor rise triggers a short squeeze, there is potential for price momentum to strengthen significantly upon breaking important levels.
The level is clear. XRP needs to close above $2.24 to confirm strength and recover the 100-day EMA. In that case, if it can reach the zone of $2.48 to $2.52, the pattern will activate. If these conditions are met, a 33% increase becomes plausible again.
On the other hand, if it falls below $1.84, the scenario weakens. Falling below $1.77 completely invalidates it. Currently, XRP has not broken out. However, if it can replicate the trends of September, the rise may become significant.
