XRP has been one of the weaker large-cap coins this week. The price of XRP has pulled back about 6% in the last seven days, pressuring short-term sentiment.
Even so, the recent pullback may not be the end of the move. The graphical analysis and on-chain data indicate that XRP is facing a decisive moment, depending on its ability to repeat a pattern observed four months ago.
Chart shows known pattern
XRP appears to be forming an inverted 'head and shoulders' structure on the daily chart. This model usually signals a potential reversal, but it depends on reclaiming key levels. Currently, the neckline of this figure is near $2.52, about 28% above current levels.
For appreciation to occur, XRP needs to first recover the 100-day exponential moving average (EMA), represented by the light blue line. The EMA prioritizes more recent prices, reacting more swiftly to trend changes than the simple average. Historically, this level serves as a watershed for XRP. In September, reclaiming the 100-day EMA resulted in an increase of approximately 12%. Still that month, a similar movement led to a gain of 16%.
So far, XRP has not managed to stay above the short-term moving averages (20 and 50 days) and was rejected again at the 100-day EMA on January 14. Still, the recent correction brought a long lower wick, indicating that buyers quickly absorbed the pressure. This behavior demonstrates demand presence, sustaining the optimistic pattern for now, as long as the EMA obstacle is overcome.
Whales and investors position themselves early
On-chain data shows early movement from large investors. Whales holding between 10 million and 100 million XRP increased their balances from about 11,140,000,000 to 11,170,000,000 tokens, valued at around $60 million at current prices.
Smaller whales, with 1 million to 10 million XRP, also expanded their holdings. The balances of this group rose from approximately 3,540,000,000 to 3,590,000,000 XRP, corresponding to nearly $100 million. These additions began around January 14, before the increase of other investors. Although some were sold on January 15, during the start of the correction, the balance remained positive since January 14.
Older investors followed the movement of the whales. Since January 16, the net variation of long-term investors' positions turned positive. This marker considers wallets that hold XRP for approximately 155 days or more, functioning as a conviction indicator, different from short-term operations.
On January 16, this group had about 223,201,195 XRP. On January 18, the balances jumped to 234,886,841 XRP. The increase was approximately 11,690,000 XRP, equivalent to a gain of 5.2% in just two days.
The period makes a difference. Whales started to increase positions during the initial correction, while long-term investors only reinforced after January 16. This staggered accumulation points to a planned purchase, not just an emotional response to the pullback.
Derivatives prepare a catalyst
The position of derivatives adds a relevant aspect. In the perpetual XRP markets, the volume of liquidation of short positions is close to $520 million, while that of long positions is around $22 million. Thus, the majority — over 95% — is positioned in the sell.
This imbalance may favor an upward movement. If a slight appreciation occurs, there is potential for a short squeeze, which could quickly intensify price strength if key levels are broken.
The levels are set. XRP needs to close above $2.24 to confirm strength and reclaim the 100-day EMA line. Thus, it could advance to the range between $2.48 and $2.52, activating the pattern. If this occurs, a bullish projection of 33% returns to the radar.
On the negative side, losing the support of $1.84 weakens the setup, and a drop below $1.77 completely invalidates the scenario. For now, XRP does not show a breakout. However, if it can replicate the movement observed in September, the rise may finally gain strength.