XRP has seen a strong rally since late 2024, but new data and patterns suggest the cryptocurrency might be nearing a market top. Let’s break it down.

Currently XRP Price trading at $2.39 as per Coinpedia Market data.

XRP has been on a tear, rallying over 385% since late 2024. Many investors and analysts have taken note of this impressive surge, sparking optimism about its long-term potential. However, a closer look at the data suggests that caution might be warranted.

Onchain analysis from Glassnode indicates that more than 70% of XRP’s realized market capitalization was accumulated near recent price highs. In simple terms, this means most of the money invested in XRP has come in at higher prices. This accumulation pattern is not new; it echoes similar market structures that preceded sharp price corrections in the past.

For context, realized capitalization measures the total value of all  XRP based on the last time each token was moved. The fact that such a large portion of this value has been concentrated at recent highs indicates that many new investors have bought XRP at elevated levels. Historically, when the market is “top-heavy”—with many newer investors buying in at higher prices—it becomes fragile. These investors are often more sensitive to price fluctuations, leading to sharper sell-offs when the market dips.

This trend is similar to what occurred in 2017 and 2021. Back in late 2017, a massive influx of capital from younger XRP coins just before the peak at $3.55 was followed by a prolonged 95% drop in price. In 2021, a similar surge in short-term holders’ realized cap preceded a nearly 80% decline. These patterns suggest that XRP may have formed a local top in January 2025 and could face downward pressure in the coming months.

From a technical perspective, XRP’s chart shows a classic falling wedge pattern. This pattern forms when the price consolidates between two downward-sloping trendlines, indicating a potential reversal. However, XRP recently failed to break above the wedge’s upper boundary, suggesting that a short-term correction may be on the horizon.

If the price follows this pattern, a pullback toward the wedge’s lower trendline seems likely. The key support level to watch is near $1.76, which aligns with the 50-week exponential moving average (EMA). This level represents a potential 25% drop from the current price levels.

Technical traders will also be eyeing this wedge pattern for any signs of a breakout. If XRP manages to hold above $1.76 and regain upward momentum, it could indicate a resumption of the bullish trend. However, a sustained break below the lower trendline might signal further weakness, potentially leading to a deeper correction.

XRP Network Activity Has Dropped Sharply

 

itself as a bridge currency for cross-border payments, aiming to provide fast, low-cost transactions. However, reduced network activity and declining active addresses could signal weakening demand for its core use case.

Moreover, the broader cryptocurrency market is showing signs of caution. Major assets like Bitcoin and Ethereum have faced resistance at key levels, and macroeconomic factors such as regulatory uncertainties and interest rate concerns could further impact investor sentiment.

XRP’s governance structure, controlled largely by Ripple Labs and associated stakeholders, also plays a role in shaping its future. The ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) continues to create an overhang on XRP’s market outlook. While recent developments have been somewhat favorable for Ripple, regulatory clarity remains elusive.

 What Should Investors Watch?

For investors considering XRP, there are several key levels and signals to monitor. The immediate support level is $1.76, which, if broken, could pave the way for a deeper correction. On the upside, a breakout above the wedge pattern and a recovery in active addresses could indicate renewed bullish momentum.

It’s also wise to keep an eye on broader market sentiment. If Bitcoin and Ethereum resume their upward trends, altcoins like XRP could benefit from a broader rally. Conversely, if the overall market turns bearish, XRP’s fragile structure could exacerbate losses.

Tread Carefully with XRP

While XRP’s recent gains have been impressive, the data suggests caution. A fragile market structure, reduced network activity, and technical signals hint at a potential price correction. Investors should stay alert, monitor key levels like $1.76, and avoid chasing prices at the top.

Before making any investment decisions, it’s crucial to conduct thorough research and consider both technical and fundamental factors. XRP’s long-term success will depend not just on price charts, but also on adoption, regulation, and broader market dynamics.