In recent action, XRP bulls retreated as the $2 support level is under pressure from volatility in the market. In particular, retail interest has fallen, and whale activity remains muted.

The momentum has slowed after the asset rallied 600% from October 2024 to January 2025. And now, XRP is wondering if it can keep the gains or if it will continue down even more.

Key-Takeaways:

• As the retail interest wanes and the whales continuously drain, XRP loses support at the $2 level. 
• If voters rebound for Trump by a narrow margin, institutional support for cryptocurrencies will fade, and this will exacerbate an already known longer-term trend towards $1.07.

Parabolic Growth of Retail Interest Wanes

This route to retreat for XRP bulls also comes as the retail traders that fueled the token’s most recent surge lose interest. XRP’s daily active addresses increased by 490% during its peak, but its momentum has since cooled.

Glassnode analysts say that weak confidence has been indicated by retail-driven inflows and concentration of wealth in newer holders. It could be another sign of uncertainty that is ahead for XRP.

Realized profit/loss metrics confirm the observation that XRP bulls are now losing more often than they are winning. This indicates that the market is already shifting to negative sentiment and diminished profitability for those who recently bought.

That equals about $30 billion of $64.2 billion in total realized cap from new investors in the first six months. The rally’s speculative nature and the increasing risk for newcomers were also underlined by their share jumping from 23 percent to 62.8 percent.

Whale Distribution Signals Caution

XRP bulls have more context to their challenges when considering large holders’ behavior. Recent on-chain data shows steady whale outflow since early 2025 and over $1 billion in sold positions in the past two weeks, at an average price of $2.10.

However, this trend is signalling that the major players are either locking in profits or putting themselves in a position to take advantage of the next downside move. The way their actions are is a reflection of cautious sentiment and maybe their decline of confidence in XRP’s near-term stability.

XRP bulls are on shaky ground due to the lack of institutional buying pressure to stop the whale outflows. Exchange interest in Binance is waning, a point evidenced by sharp outflow drops from 12 billion XRP to 115 million as well.

This weakens support at the $2 level due to liquidity drain. As the threshold weakens at each retest, the chances are favored for a breakdown.

XRP bulls have a mixed chart reading because while there are short-term bullish signals, there are longer-term bearish signals. A bullish divergence has formed on the 1-hour and 4-hour charts, which is when price makes lower lows while the RSI makes higher lows.

A short-term relief rally could potentially occur, given this setup and a fair value gap between $2.08 and $2.13. Nevertheless, market support and sentiment shifts are necessary to continue.

Red flags for XRP bulls, though, show up higher in the time frame. An inverse head and shoulders pattern is a measured downside target around $1.07, which represents a huge potential downside from current prices.

Interim support may be found at the 200-day moving average around $1.70–$1.80. However, under current market conditions it is still quite questionable how strong it really is, since it hasn’t been tested after November 5, 2024.

Post-Election Euphoria Fades

XRP’s surge during a post-election period has largely fizzled out now. Concerns about whether lasting investor demand can remain have overtaken optimism of a ‘pro-crypto’ presidency initially.

A key weakness that is absent in retail-driven FOMO is the election rally, a COINOTAG analyst noted. XRP’s market resilience is wearing thin without renewed excitement.

The sentiment shift sheds light on XRP’s rally core weakness being its reliance on speculative retail interest as opposed to real adoption or institutional backing. The momentum in the rally was always fragile, without strong fundamentals.

Since whales pull back, newer investors are receiving smaller returns, and the base for XRP bulls is slowly eroding. Doubts arise over long-term sustainability as there is no real deep conviction.

Conclusion

Without retail or institutional backing, the XRP bulls can not hold the $2 support level. Curves upward to just around $2.08-$2.13 short term, but to dip down in the long term. Will XRP bulls rebound, or is an excessive correction on its way?