XRP: Navigating the Current Market Challenges and Support Levels

Between October 25, 2024, and January 16, 2025, XRP (XRP) witnessed one of the most significant rallies of the ongoing bull market, recording a staggering 600% increase. This surge was largely driven by investor optimism surrounding a pro-crypto presidential administration that could favor Ripple and its cryptocurrency.

The rally coincided with a 490% increase in the quarterly average of daily active addresses, propelling XRP’s price to a remarkable seven-year high.

Fast forward to the present, data indicates a significant decline in speculative interest towards XRP. Many holders are now experiencing losses rather than gains, which has adversely affected their overall risk appetite.

Retail Confidence in XRP May Be Slipping

Despite both Bitcoin (BTC) and XRP rallying by 500% to 600% since bottoming in 2022, the majority of XRP’s gains came from a parabolic increase in price. According to data from Glassnode, XRP’s daily active addresses surged by 490%, whereas Bitcoin’s only saw a 10% increase in the same timeframe.

This retail-driven influx elevated XRP’s realized cap from $30.1 billion to $64.2 billion, with approximately $30 billion originating from new investors within the past six months. The share of XRP’s realized cap among newer investors (holding for less than six months) increased from 23% to 62.8%, signifying a rapid shift in wealth. However, since late February 2025, there has been a marked decline in capital inflows.

The primary factor for this downturn is the ongoing trend of investors securing fewer profits and witnessing higher losses. The realized loss/profit ratio has been on a constant decline since early 2025. Glassnode analysts note:

“Given the retail-dominated inflows and largely concentrated wealth in relatively new hands, this indicates a scenario where retail investor confidence in XRP may be diminishing and this trend could extend across the broader market.”

In addition to declining confidence among new investors, the distribution of XRP among whale addresses also reveals a concerning trend. Data from CryptoQuant shows a consistent increase in whale outflows since the beginning of 2025, indicating that large holders are systematically reducing their positions. Over the past two weeks alone, over $1 billion in positions were offloaded at an average price of $2.10.

Related: How many US dollars does XRP transfer per day?

Can XRP Hold the $2 Support?

XRP has repeatedly found support at the $2 level in recent weeks, yet the likelihood of the cryptocurrency dropping below this crucial mark appears to increase with each retest.

However, in the lower time frames (1-hour and 4-hour charts), there is an observable bullish divergence for XRP. A bullish divergence occurs when the price presents a lower low, while the Relative Strength Index (RSI) shows a higher low.

With a fair value gap identified between $2.08 and $2.13, XRP may experience a relief rally into this range, particularly if the broader cryptocurrency market witnesses an oversold bounce. On the higher chart time frame, XRP appears bearish, marked by an inverse head-and-shoulders pattern, suggesting a potential target near $1.07.

There remains a possibility that this altcoin might find support from the 200-day moving average (indicated by the orange line) around the $1.70 to $1.80 range, a level not tested since November 5, 2024.

Related: Bitcoin drops 8%, US markets shed $2T in value — Should traders expect an oversold bounce?

This article does not constitute investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research before making any decisions.