XRP Price Could Dip 20% Before Next Rally: Data Analysis
XRP has surged nearly 26% this past week, briefly hitting $3.01 and currently trading around $2.93. Despite the bullish momentum, on-chain data indicates a possible short-term correction.
A surge in whale transactions combined with rising exchange reserves suggests a scenario similar to previous local tops. This setup may trigger a 20% drop before XRP resumes its upward trend.
Exchange Reserves Signal Caution
XRP exchange reserves (Binance) have reached 2.96 billion, the highest since January 2025. This increase signals potential selling pressure. CryptoQuant data shows the last time reserves were this high (May 2025), XRP faced a 20% correction, dropping to $2.01.
Rising exchange reserves typically indicate increased movement of tokens to exchanges, often preceding sell-offs. The current trend mirrors the May peak, suggesting an upcoming cooldown in XRP's price.
Whale Transactions at 3-Month High
Corroborating this outlook, XRP whales executing transactions exceeding $1 million have reached a three-month high. Historically, such spikes precede distribution phases and price corrections, where large holders offload positions at local tops.
The timing of this metric coincides with the exchange reserve spike, reinforcing the bearish perspective.
XRP Price Might Correct to $2.34
From a technical standpoint, the recent move from $1.90 to $3.03 places the 0.618 Fibonacci retracement level at $2.34. This level often acts as a key area during consolidations or corrections.
A drop from the current XRP price of $2.93 to $2.34 would constitute a 20% correction. This aligns with the May decline following a similar exchange reserve surge.
Immediate short-term support lies at $2.80 (standard support line) and $2.77 (0.236 Fib level). A break below these levels could accelerate the decline toward the $2.34 Fibonacci level.
This bearish scenario would be invalidated if XRP holds above $2.77 while exchange reserves decline, suggesting renewed accumulation rather than distribution.
If the token maintains this support and XRP Whales cease offloading, the bullish momentum could resume, potentially pushing the XRP price back toward retesting the $3.03 level.
Disclaimer: This analysis is for informational purposes only and not financial advice. Market conditions can change. Always conduct your own research before making financial decisions.