XRP Price Prediction: Will It Push Higher or Drop to $2.13?

XRP reached a new all-time high of $3.41 on January 16. However, it has remained rangebound since then, facing resistance at $3.27 and finding support

XRP has remained rangebound after reaching a new all-time high of $3.41 on January 16. While this sideways movement indicates a relative balance between buying and selling pressures, on-chain data suggests that a downside breakout may be on the horizon in the coming weeks.

After experiencing a 500% surge in November 2024, XRP underwent a minor correction, trading between $2.6 and $2.0 before bouncing back. By January 16, it broke through the $3 resistance and reached a new all-time high of $3.41.

Since then, the altcoin has traded within a price range, suggesting that neither the buyers nor sellers have full dominance. However, BeInCrypto's assessment of XRP's on-chain performance hints at growing bearish pressure, which may result in a price dip in the coming weeks.

For instance, XRP's Market Value to Realized Value (MVRV) ratios, assessed over multiple moving averages, indicate that the altcoin is overvalued, which could prompt holders to sell for a profit. According to Santiment, at the time of writing, the token's seven-day and 30-day MVRV ratios are 1.50% and 14.17%, respectively.

An asset's MVRV ratio identifies whether it is overvalued or undervalued by measuring the relationship between its market value and its realized value. When the ratio is negative, the asset's market value is lower than its realized value. This suggests that the market is undervaluing the cryptocurrency compared to what people originally paid for it.

On the other hand, as with XRP, when the ratio is positive, its market value is higher than the realized value, suggesting it is overvalued. This metric suggests that XRP's current price of $3.10 is higher than the acquisition basis for many of its holders. This may lead them to sell their holdings for a profit, putting downward pressure on the token's price.

Moreover, the actions of XRP whales may contribute to this downward pressure. As per Santiment, XRP whale addresses that hold between 10 million and 100 million tokens have reduced their holdings by 1% since it reached an all-time high. Over the past month, this group of large investors has sold 60 million XRP valued at over $180 million.

When whales reduce their holdings like this, it puts downward pressure on the asset's price, especially if the market struggles to absorb the selling volume. If this trend continues, XRP will experience a decline in the next few weeks.

A breakdown below the horizontal channel due to a spike in profit-taking activity will steer XRP's price away from its all-time high. In this case, its price could drop below $3 and trend toward $2.13.

However, if profit-taking stalls and XRP holders resume accumulation, this could push the token's price past the resistance formed at $3.27 toward its all-time high of $3.41. If demand is strong enough, it may even break above this price peak to record a new high.