XRP price attempted a rebound a few sessions back, but the move failed to hold. After bouncing from January 20 to January 21, XRP stalled near $1.98 and rolled over again. It now trades close to $1.90, slipping back toward a zone where downside risk is starting to dominate.
The chart shows a clear bearish structure forming. Under the surface, capital flows, holder behavior, and exchange activity all point in the same direction. While long-term holders (HODLers) are still buying, profit-taking from other groups is keeping XRP under pressure. The question now is whether conviction alone is enough to prevent a deeper breakdown.
XRP Chart Signals Breakdown Risk as Capital Flows Turn Negative
On the 12-hour chart, XRP is close to forming a head-and-shoulders pattern. The neckline of this structure sits near $1.80.
If XRP loses that neckline, the projected move points to an 18% decline.
Capital flows support this risk. Between January 19 and January 22, the Chaikin Money Flow (CMF) continued trending lower, along with the price. CMF tracks whether large players are moving money into or out of an asset using price and volume. When CMF falls alongside price, it signals capital outflows rather than organic consolidation.
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That weakness lines up with ETF data. On January 20, XRP ETFs recorded a sharp net outflow of about $53.3 million. This single day outweighed surrounding inflows, keeping the ETF balance net negative for the period. While the last two days showed modest positive numbers, they have not been strong enough to push CMF back above its falling trendline.
As long as CMF remains below that line, the breakdown risk stays active. But other risks remain active as well.
Short-Term Holders Exit Aggressively, Capping Rebound
The failure near $1.98 was not random. Holder data explains why upside attempts have struggled.
HODL Waves, a metric segregating wallets based on time, show that one of the most speculative cohorts, wallets holding XRP for one week to one month, has been selling steadily since January 8. Over that period, their supply share dropped from roughly 4.77% to about 2.24%. That is a reduction of more than 50% in just two weeks.
This group typically buys dips and sells rebounds. Their aggressive selling during every bounce helps explain why XRP could not hold above $1.98, even during short-lived recovery attempts.
This selling pressure is also visible in exchange flow data. XRP exchange balances flipped from persistent net outflows (7.68 million XRP) earlier in the month to net inflows (201,000 XRP) by January 23. That shift signals more tokens moving onto exchanges, consistent with profit-taking rather than accumulation.
In short, speculative sellers have been front-running every rebound. But why are we just blaming the short-term cohort?
Long-Term Holders Still Accumulate — The Only Line of Defense
Not all holders are selling.
Long-term XRP holders have continued to accumulate steadily since around January 10. Their net position change shows no sharp drawdowns, even as the XRP price weakens. This cohort has acted as a stabilizing force, helping XRP avoid an immediate collapse despite heavy selling elsewhere.
This proves that long-term holders are not contributing to exchange inflows, suggesting conviction rather than short-term trading.
However, this support has limits. Long-term accumulation can slow a decline, but it does not guarantee a reversal if capital outflows and profit-taking continue. Without stronger inflows from ETFs or a shift in speculative behavior, conviction alone may only delay the breakdown.
XRP Price Levels Flag The Risk
The XRP price structure now comes down to clear levels.
On the downside, $1.80 is critical. A confirmed break below this level would validate the head-and-shoulders pattern and open the door toward $1.46, completing the projected 18% move.
On the upside, XRP must reclaim $2.02 on a sustained close to invalidate the right shoulder. That would signal that profit-taking is losing control. A stronger bullish shift would follow above $2.19, while the broader bearish structure only fully dissolves above $2.41.
For now, the XRP price sits in between. Long-term holders are buying, but speculative sellers and capital outflows are still dictating price action. Unless flows improve and selling pressure fades, hodler conviction may slow the fall, but it may not be enough to stop it.
