XRP nears key support after steep sell-off

Adam

Summary:

XRP has slid 55% from recent highs, pressured by risk-off sentiment and liquidations, and now tests key support, with near-term bias bearish unless it reclaims January highs.

XRP nears support area

XRP has experienced a turbulent spell since October, with a sharp 55% sell-off underlining how sensitive the token remains to shifts in macro sentiment, leverage and investor positioning, even as its longer-term adoption narrative continues to evolve.

Going into the second half of January, XRP had already begun to lose momentum after a strong start to the year. Earlier gains of close to 40%, driven by optimism around regulatory clarity and renewed institutional interest, had lifted prices sharply from late-2025 levels. That rally, however, left XRP increasingly vulnerable to profit-taking, particularly as broader crypto market liquidity thinned and risk appetite began to waver.

The current sell-off gathered pace as a broader risk-off move swept through global markets. Briefly rising bond yields, renewed uncertainty around the timing of interest-rate cuts and weakness across equity markets triggered de-risking across speculative assets.

XRP, which tends to amplify moves during periods of market stress, came under pressure as traders cut exposure quickly, pushing the token down through near-term support levels and accelerating losses.

Leverage played an important role in magnifying the decline. In the days leading up to the sell-off, derivatives data showed a build-up of long positions as traders positioned for further upside following XRP’s early-year strength. When prices failed to extend higher and instead rolled over, funding rates softened and stop-losses were triggered. Liquidations followed, forcing leveraged longs out of the market and driving XRP lower than spot selling alone might have caused.

Sentiment specific to the XRP ecosystem also contributed to volatility. While discussion around potential spot XRP exchange-traded products and broader institutional access has continued since mid-January, progress has remained incremental rather than decisive. This left short-term traders focused more on macro signals and technical levels than on longer-term narratives, reinforcing downside pressure when markets turned defensive.

Macro conditions remain central to XRP’s near-term direction. As bond yields eased and equity markets stabilised and, in Asia and the United States (US), hit record highs, XRP participated but only in a very modest fashion, underscoring its loose correlation with shifts in global risk appetite. However, this week's mild recovery has so far lacked any follow-through, highlighting lingering caution among investors after the speed of the earlier decline and ongoing uncertainty around monetary policy and growth prospects.

Taken together, XRP’s recent sell-off illustrates that the cryptocurrency remains vulnerable to abrupt swings driven by macro shocks and leveraged positioning. Over a longer horizon, continued progress in payments adoption, regulatory engagement and institutional interest provide a supportive backdrop that has so far limited downside.

Looking ahead, XRP’s path will depend on whether broader market conditions continue to stabilise and whether buyers can build on the recovery without renewed selling pressure from short-term holders.

For now, the current episode serves as a reminder that while XRP’s structural narrative has strengthened since mid-January, volatility remains a defining feature of its price action.

XRP bearish case:

While XRP remains below the 20 January high at $1.9894 on a daily chart closing basis, immediate downside pressure will remain in play with the $1.8193 - $1.7713 support area perhaps being revisited.

Failure there may put the April low at $1.6153 on the cards.

XRP bullish case:

As long as XRP manages to hold in the $1.8193 - $1.7713 support zone on a daily chart closing basis, another attempt at the upside may be seen.

For this to become probable, a rise and daily chart close above the 20 January high at $1.9894 would need to ensue. Even then the $2.0283 - $2.0859 resistance area may well thwart any upside short-term attempt. Only of overcome, could the early January peak at $2.4159 be back in play.

Short-term outlook:

Bearish while below the 20 January high at $1.9894; only a rise above the 19 January high at $2.0283 would change the outlook to a neutral one, though.

Medium-term outlook:

Neutral with a bearish bias while trading below the 14 January high at $2.1905 but above its $1.8193 November through.

XRP daily candlestick chart

Source: ig

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