The XRP price is in a dangerous position. Around $1.89, XRP is trading only 1% above a crucial support level. On the surface, the chart looks calm. Beneath, several signals suggest that risk is quietly building up. What makes this setup unusual is not just the proximity to the support level. It's what did not happen previously.
XRP recently signaled a bullish trend that usually leads to at least a short-term rise. This time, the price barely moved. The lack of reaction is the real warning.
Hidden bullish divergence failed - a warning sign?
Between December 31 and January 20, the XRP price formed a hidden bullish divergence on the daily chart. The price made a higher low, while the Relative Strength Index (RSI) made a lower low.
A hidden bullish divergence usually signals that selling pressure is starting to wane, and that buyers may soon take control back. It does not guarantee a rise, but often leads to the price potentially increasing or at least a period of calm rise.
It did not happen this time.
After the divergence occurred, XRP barely rose. The price stalled, and the momentum never increased. This tells us something important. Sellers may have slowed down, but buyers did not step in to replace them.
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This type of divergence failure often occurs in weak markets. It shows uncertainty, not strength. When a bullish signal fails, it usually means demand is lacking, not that the signal was wrong.
The rising XRP wedge structure still points towards a possible 25% drop if the support level breaks. With buyers gone and sellers slowly taking back control, XRP is approaching a point where even a small drop could trigger a much larger move.
And if buyers do not show up when selling pressure decreases, what happens when sellers return?
ETF flows and holder data confirm that demand is weakening
The answer starts with capital flows.
For the first time in several weeks, ETF products related to XRP recorded net outflows. The week ending January 23 showed a total outflow of about $40.5 million. This came after a long period of steady inflow and marks a clear behavior shift.
ETF flows are important because they reflect large, directional capital movements. When the inflow stops and turns negative, it usually means that institutional demand is pausing or pulling back.
On-chain data tells a similar story.
The indicator XRP Holder Net Position Change, which shows the monthly balance change for long-term holders, has flattened out and started to decline. On January 20, long-term holders controlled around 232.1 million XRP. By January 24, the number had fallen to about 231.55 million XRP.
This is not aggressive selling, but it is also not accumulation. After the divergence, long-term holders did not significantly increase their holdings. This confirms what the price action has already suggested. Buyers were not confident enough to take the risk.
When ETF demand stagnates and long-term holders pause simultaneously, the rise often struggles to get going.
The whale sale holds the risk of XRP price drop alive
While buyers hesitated, there was one group that actually took action.
Wallets holding between 10 million and 100 million XRP began to reduce their exposure. On January 18, this group had about 11.16 billion XRP. By the last reading, the balance had dropped to around 11.07 billion XRP.
This is a reduction of about 90 million XRP. At today's XRP price, this corresponds to about $170 million in distribution.
This selling pressure also explains why XRP did not react to the hidden bullish divergence. It also explains why the price remains tightly near the support level. From a technical perspective, the risk is now clear.
A daily close below $1.85-$1.86 will break wedge support and activate the downside price target. This opens up a drop towards the $1.70 region first, followed by a deeper move towards $1.42 if momentum increases. It will approach the almost 25% major breakdown target.
On the upside, XRP must regain $1.98 to weaken the bearish pressure. This would provide short-term relief, but without renewed buying interest, it will likely remain a rise rather than a trend reversal. Right now, the imbalance is evident. Selling exists. Buyers do not.
