XRP has plunged for seven straight days, trading below $1.95 as increasing bearish sentiment takes hold of the cryptocurrency market. As of January 21, the continual decline saw XRP reach a low of $1.8681 before a temporary bounce lifted it back above $1.90. However, bearish pressure remains significant, with XRP currently lingering below its 100-hour Simple Moving Average.
A bearish trend line has established resistance at $2.00. For any meaningful recovery to occur, XRP must breach this significant level, which many investors are watching closely.
On January 20, the US XRP-spot ETF market experienced net outflows totaling $53.32 million, marking only the second instance of such outflows since the ETFs launched on November 14. Despite the recent downturn, total net inflows since the inception of the ETFs still stand at a robust $1.22 billion.
The Grayscale XRP ETF notably saw the largest outflow, with $55.39 million leaving its coffers. This trend aligns with growing investor skepticism regarding geopolitical risks and the overall trajectory of the cryptocurrency market.
Global Events Impacting Cryptocurrency Valuations
The recent announcement by Japan’s Prime Minister Sanae Takaichi concerning a snap election on February 8 has sparked a rise in 10-year Japanese Government Bond (JGB) yields. This increase raises liquidity concerns in global markets as higher yields can divert investments away from riskier assets, including cryptocurrencies.
XRP’s price movements have demonstrated a notable inverse correlation with the JGB yields, indicating a heightened sensitivity to shifts within the Japanese bond market. Additionally, as concerns surface regarding Japan’s fiscal policies and a staggering 240% debt-to-GDP ratio, risk premiums are projected to heighten further.
Further compounding these concerns is President Trump’s recent threat of a 10% tariff on eight NATO members, announced on January 17. This declaration has fueled a risk-off sentiment among investors throughout global markets, prompting a flight to perceived safe-haven assets. XRP, along with other cryptocurrencies, remains vulnerably tethered to these international trade developments.
With President Trump’s anticipated address at the World Economic Forum in Davos on January 21, industry watchers will be attentive to any escalation of tariff threats that could potentially exert additional downward pressure on XRP prices.
Price Resistance and Target Projections
Immediate resistance for XRP is presented at $1.95. Should it breach this level, significant hurdles lie at $2.00 and the overarching trend line. A close above $2.00 could pave the way for a move towards $2.05. Conversely, initial support is seen near $1.88, with key support levels identified at $1.85. A fall below these thresholds could signify a bearish trend reversal, with potential drops towards $1.82 and $1.80.
Despite the current bearish landscape, analysts remain cautiously optimistic, setting short-term targets at $2.50 and medium-term projections reaching $3.00 within the next four to eight weeks. For a longer-term view, they extend targets to $3.66 over twelve weeks, contingent upon increased utility for XRP and sustained ETF interest.
However, several factors pose risks to these optimistic projections, including potential tariff escalations from President Trump, hawkish monetary policy shifts from the Bank of Japan, delays in anticipated crypto legislation, and ongoing ETF outflows. A breach of key support at $1.85 would notably shift market sentiment towards a bearish outlook.
