The price of XRP is in a dangerous position. At around $1.89, XRP is trading only 1% above the key support area. On the surface, the chart looks calm. However, there are several signals below indicating a slow increase in risk. The unusual part of this situation is that what happened previously was not what was expected.
XRP recently gave a bullish signal, based on which we usually see at least a short-term rebound. This time, the price barely moved at all. This failure is a real warning sign.
Latent bullish divergence failed – red flag?
Between December 31 and January 20, the price of XRP formed a latent ascending divergence on the daily chart. The price made a higher low, while the Relative Strength Index (RSI) recorded a lower low.
Latent upward divergence often means that selling pressure is weakening and buyers may soon take control of the market. It does not guarantee a price rally, but it often leads to a correction or at least a short-term upward phase.
However, this did not happen.
Once divergence appeared, XRP only rose slightly. The price froze, and the sentiment did not strengthen. This indicates something important. Sellers quieted their pace, but buyers did not come to the market in their place.
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Such a failure of divergence often occurs in weak markets. It indicates hesitation, not strength. When a bullish signal fails, it usually means a lack of demand – not that the signal was wrong.
The ascending wedge of XRP still indicates about 25% downward potential if support fails. With buyers absent and sellers gradually returning to activity, XRP is approaching a moment where even a small downward movement could trigger a significantly larger movement.
Furthermore, if buyers do not appear after the selling pressure eases, what happens when sellers return?
ETF investments and holder data confirm that demand is weakening.
The answer lies in capital flows.
For the first time in a long time, XRP-related ETF products experienced a net outflow. In the week ending January 23, the net flow was a total of about 40.5 million dollars out. This was preceded by a long period of steady investment flows, making the change clear.
ETF flows matter because they reflect the movements of large and directional capital. When investments stop and turn negative, it usually means institutional demand has stalled or withdrawn.
Blockchain data tells a similar story.
The XRP Hodler Net Position Change metric, which tracks the monthly balance of long-term holders, has stabilized and started to decline slightly. On January 20, long-term holders controlled about 232.1 million XRP. By January 24, the amount had decreased to about 231.55 million XRP.
This is not yet strong selling, but it is also not accumulation. When divergence occurs, long-term holders did not significantly increase their holdings. This confirms what the price development has already indicated – buyers did not have enough confidence to commit.
When ETF demand stops and long-term holders sit on the sidelines, returns often remain subdued.
Whale selling keeps the price risk of XRP alive.
While buyers hesitated, one group, however, acted.
Wallets holding 10–100 million XRP started to reduce their exposure. On January 18, this group held approximately 11.16 billion XRP. According to the latest reading, the balance had dropped to about 11.07 billion XRP.
The drop is about 90 million XRP. At the current price of XRP, this corresponds to about 170 million dollars in sales.
Selling pressure also explains why XRP did not react to the latent uptrend. It also explains why the price remains near the support level. From a technical perspective, the risk is now clear.
A daily close below $1.85–$1.86 would break the wedge support level and trigger a downward target. This first opens the door to the $1.70 range, and if momentum accelerates, the movement could continue deeper towards $1.42. At that point, we would be approaching nearly a 25% downward target.
To move upward, XRP must rise back to the $1.98 level, which would weaken the downward pressure. This would provide temporary relief, but without new buyer activity, it would likely just be a bounce, not a trend reversal. The imbalance in the market is clear. There are sellers, and there are no buyers.
