XRP price warning signs emerge after 300% gains in two months

XRP’s price has rallied by over 300% in the past two months and was trading at $2.10 on Dec. 27. Still, warning signs suggest that XRP/USD may erase at least 25% of those gains in the short term.

XRP/USD daily price chart. Source: TradingView

XRP nears descending triangle breakdown

XRP’s ( XRP ) recent losses come as its price trades within a descending triangle pattern, a bearish structure that typically signals further declines.

This pattern is defined by a series of lower highs forming the triangle’s descending trendline, while the $2.10 level acts as horizontal support.

XRP/USD daily price chart. Source: TradingView

A decisive breakdown below the $2.10 support level could open the door to a deeper correction. The potential downside target for this breakdown is calculated by subtracting the triangle’s height from the breakdown point, per the rule of technical analysis.

Related: XRP price must reclaim $2.30 to absorb buy wall — Analyst

In other words, XRP’s price may decline to about $1.64 in January 2025, down about 25% from the current price levels.

XRP whales sell the rip

Onchain data further supports a bearish outlook, with metrics tracking whale addresses revealing distribution sentiment.

Notably, the XRP supply held by its richest investors — those with a balance of over 1 million tokens — has declined by 180 million since December’s beginning.

XRP supply in addresses with a balance of over 1M. Source: Messari

Meanwhile, the supply held by entities with a 100,000 XRP balance has dropped by 170 million. The drops in the supply of both address cohorts align with XRP’s 26%-plus price decline from its local top of $2.90.

XRP supply in addresses with over 100,000. Source: Messari

Large-scale whale selling can create downward pressure on prices due to the increased token supply in circulation. Combined with the price decline, this suggests that selling activity has overwhelmed demand.

XRP supply on Binance is rising

Additionally, XRP reserves on Binance, the largest cryptocurrency exchange by volume, have been steadily increasing since mid-December, typically a bearish signal as it often precedes price corrections.

XRP Ledger Binance exchange reserves. Source: CryptoQuant

The rise in exchange reserves reinforces the narrative of profit-taking at local highs, contributing to XRP’s ongoing bearish momentum.

Unless this trend reverses, XRP price could face 25% downside risks as supply on exchanges grows and large holders continue to sell the rips.