XRP turned around its short-term downtrend during the midweek and thus ended a seven-day losing streak. The improvement in global risk sentiment drove the change, reviving buying interest across the crypto markets. The move was in response to the announcement Wednesday of U.S. President Donald Trump to withdraw the proposed 10% tariff on European Union nations, which alleviated the fears of a wider trade conflict. Although the trigger was macro-driven, XRP’s price reaction is a clear indication of the growing impact of sentiment changes on the technically compressed market structure.
Earlier in the week, fears of a trade war intensified, which triggered a certain degree of risk aversion and consequently stressed equities and digital assets. XRP was among the large-cap tokens that suffered the most, losing almost 12% and falling to an intraday low of $1.8489 as traders cut back on exposure to higher-beta assets. This decline was a continuation of the previous correction over several days and it significantly pushed the price below important moving averages, thus confirming short-term bearish signals.
Why XRP Sold Off: Macro Risk and Position Unwinding
The initial sell-off was not the asset’s specific weakness; it was the macro uncertainty that was in force. Trump’s tariff threat triggered concerns related to diminished global trade, tightening financial conditions, and reduced liquidity appetite. In such phases, high-risk assets like crypto typically experience a downside as leveraged positions start to unwind and overall demand from buyers weakens.
XRP’s drop to the $1.85 area showed this interplay. Additionally, higher intraday volatility and weaker momentum attributed to the price movement, which indicates forced selling rather than natural distribution. The most significant thing was that there was no selling below the specified level that could be called follow-through, which suggested that the downside pressure was turning weaker as the macro situation became clearer.
Tariff Withdrawal Triggers Relief Rally in Risk Assets
Yesterday, Trump made a public announcement where he discussed a possible agreement with NATO involving Greenland and the EU tariffs that had been stated earlier would remain dormant until February 1. Market players perceived the news as the most explicit ruling out of trade conflicts, leading to a widespread rally of relief across all risk assets worldwide.
XRP came back with a daily gain of 3.13%, finishing at $1.9463 and surpassing the wider cryptocurrency market. The rebound did not instantly change the existing trend; it was a clear rejection of lower prices, and it also strengthened the $1.85 support zone.
Market Structure Holds Strong
However, the technical setup for the asset’s price suggests a more positive outlook. The price at $1.95 is still trending above the daily support level at $1.85, which is now considered as a demand zone, and this spot coincides with the previous low swings and the lower levels of XRP’s bullish structure. This area is heavily occupied by buyers, and therefore it prevents the price from deeper correction.
The momentum indicators indicate signs of stabilization, and after several days of decline, the selling pressure is becoming weaker. The fact that a lower low was not established after the macro surprise points to XRP possibly shifting to the phase of consolidation or base-building rather than going through a new dip in prices.
The $2.00 level now represents the most immediate technical pivot. A sustained daily close above this threshold would bring the 50-day EMA into play. A break and hold above the 50-day EMA would signal a near-term trend reversal and open the path toward the resistance level of $2.5.
In the downside scenario, a steady drop below $1.85 would negate the existing setup and make XRP prone to more significant pullbacks toward $1.75 and $1.50. This type of movement would probably necessitate a fresh risk-off shock or a further weakening of macroeconomic conditions.
Fundamentals Continue to Offset Weak Technical Signals
While technical indicators remain mixed, XRP continues to benefit from supportive fundamentals. Demand for XRP spot ETFs has maintained relatively stable, constraining the depth of lately drawdowns. In parallel, improving real-world utility and increased institutional involvement have helped construct a medium-term valuation floor. According to sources like Sosovalue, the daily total net inflow for the metric stands at $7.16 million.
The Ripple CEO Brad Garlinghouse’s remarks at the World Economic Forum backed up the belief that regulatory clarity might be the main reason for more adoption. However, the legislative changes did not affect the rebound of Wednesday directly but are still influencing the positioning of the next few months, especially of the investors with a long-term view.
Medium-Term Outlook Hinges on Key Breakout Levels
XRP’s future path will be determined by the ability of the improving market mood to get the technical confirmation from the bulls. A reclaim of $2.00 would change the near-term momentum in favor of the bulls, while a clear break above the 200-day EMA would further strengthen the medium-term bullish case and support targets around $3.00.
On the other hand, breaking the $1.85 support zone would indicate a return to the bearish phase and would weaken the positive perspective. At this moment, XRP is still technically restricted, but to some degree, it has not changed in its essence; the price fluctuation is becoming more and more connected with and responsive to the macroeconomic situations and changes, in addition to the global risk-taking preference.
In summary, macro de-escalation sparked XRP’s rebound, but its ability to defend key technical support highlights underlying strength in the market structure. The upcoming sessions will be crucial in predicting whether the token can transform this relief rally into a sustained trend reversal or goes on range-bound under key resistance levels.
