Over the past two months, XRP's price has surged by more than 300%, reaching $2.10 on December 27. However, recent technical indicators and market dynamics suggest that XRP may face short-term correction risks.
Descending Triangle Pattern Indicates Potential Pullback
XRP's current price movement has formed a descending triangle pattern, a bearish structure that typically signals potential price declines.This pattern is characterized by a series of lower highs forming a descending trendline, with the $2.10 level acting as horizontal support.A breakdown below the $2.10 support could lead to a deeper correction.According to technical analysis principles, the potential downside target can be calculated by subtracting the triangle's height from the breakdown point.Therefore, XRP's price may decline to around $1.64 in January 2025, approximately 25% below current levels.
Whale Selling Pressure
On-chain data further supports this bearish outlook, showing distribution among large holders (whales).Notably, addresses holding over 1 million XRP have collectively reduced their holdings by 180 million XRP since early December.Similarly, entities with balances between 100,000 and 1 million XRP have decreased their holdings by 170 million XRP.These reductions coincide with XRP's decline of over 26% from its local high of $2.90.
Increasing Exchange Reserves
Additionally, XRP reserves on Binance, the world's largest cryptocurrency exchange by volume, have been steadily increasing since mid-December.Typically, rising exchange reserves are considered a bearish signal, as they indicate more tokens are available for sale, potentially leading to price declines.This increase reinforces the narrative of profit-taking at local highs, contributing to XRP's bearish momentum.Unless this trend reverses, XRP's price could face a 25% downside risk as exchange supplies grow and large holders continue to sell.