XRP after correction: Principal market risks and technical warning signals in focus

The price rally of XRP in early January was impressive – and quickly over. The coin rose from below $1.90 to a multi-month high of $2.40, gaining around 30% in value. However, since this peak, XRP has been steadily losing ground and is currently trading at $2.12 with a 24-hour decline of 0.32%. What drove these rapid movements? ETF inflows and declining XRP holdings on exchanges were considered classic bullish indicators. But the reversal came faster than expected.

Technical signals indicate potential reversal danger

The key warning signal comes from technical analysis. The well-known analyst Ali Martinez identified a so-called Gravestone Doji formation – a candlestick pattern that looks like an inverted “T” and typically precedes a trend reversal. This pattern is especially significant when it appears immediately after explosive price increases, as was the case with XRP.

The message of this constellation is clear: buyers pushed the price higher but were heavily rejected at that level. This suggests that sellers have taken control and a longer downward trend could follow – not just a healthy pause.

Whale activity shows critical shift

A parallel indicator comes from the so-called whales – large investors who often anticipate market movements. Immediately after the price jump, the highest increase in XRP transfers since October was recorded. Such sudden large transfers can indicate nervous market dynamics – professionals hedging or reducing their positions.

But now, a dramatic decline in whale activity is evident. Large transfers have decreased significantly. This is critical because if institutional capital is lacking, the strength to defend higher price levels often diminishes. Combined with the technical reversal signal, this creates a concerning scenario.

Principal risk analysis for investors

From fundamental and technical perspectives, XRP is at a crucial point. The facts are clear: strong initial rally, rapid decline, potentially bearish chart pattern, and decreasing large investor activity. This does not necessarily guarantee a crash, but it significantly increases the risks.

For market participants, this means: watch whether XRP can hold the next technical support levels. If these break, the New Year’s euphoria could quickly turn into disillusionment – and the 30-percent rally could become an expensive learning moment. Discipline and careful observation are now essential.