XRP Faces Uncertain Future Amid Key Pattern Retest

XRP is once again at the center of attention as traders watch closely for its next significant move. The cryptocurrency has shown signs of strength recently, but critical chart patterns and investor sentiment highlight potential volatility ahead.

After gaining over 50% in value over the past five weeks and reaching $2.42 on May 16, XRP is still trailing behind its yearly high of $3.40 recorded in January 2025. This rebound has piqued hopes, yet some analysts warn that it could be a classic bull trap if not followed by sustained growth.

Falling Wedge Pattern Signals Potential Upside

According to technical analysis, XRP is currently retesting the breakout point of a falling wedge pattern—a setup that typically indicates a bullish trend if successfully maintained. This wedge pattern began to take shape several months ago, and the recent pullback to its upper boundary could either confirm or nullify this bullish structure.

Analysts suggest that holding above this critical trendline may spark renewed upward momentum. In such a scenario, XRP could target a climb toward $3.60. This upside objective is calculated by measuring the vertical height of the wedge and adding it to the breakout level.

If XRP manages to remain above this former resistance—which now acts as support—it would signal strong market demand. However, should XRP fall back beneath the wedge’s ceiling, the technical setup would be invalidated. This could pave the way for a potential drop toward the next significant support zone around $1.75.

Bearish Reversal Pattern Raises Red Flags

While some indicators remain hopeful, XRP appears to be forming an inverse cup-and-handle pattern—an historically bearish signal in technical analysis. This formation has been developing over the past five months, with the rounded ‘cup’ seen from December 2024 to March 2025, followed by a brief consolidation or ‘handle’ phase extending into May.

This pattern’s neckline lies near the $1.11 support level. A confirmed break below this point could result in a deep retracement for XRP. Based on the measured height from the top of the cup to the neckline, this move could send the token tumbling down to approximately $0.50. Such a drop would represent a nearly 80% decline from current price levels.

Adding to this concern is the declining trading volume during the handle formation, as well as a neutral relative strength index hovering around 50—both signs that the upward momentum is weakening.

Whale Wallets Suggest Mixed Signals

Market data as of May 15 reveals that large XRP holders—those with over 10,000 tokens in their wallets—are currently in the red. Specifically, the average acquisition cost among this group is $2.58, above the current trading value.

Historically, when these ‘whales’ are underwater on their positions, XRP sometimes retraces back toward their average entry point. However, these recoveries are often temporary and tend to precede broader corrections to lower support levels held by smaller investors.

For instance, back in September 2021, XRP briefly surged to $1.19, slightly above the average whale buy-in level of $1.01. That movement was short-lived, and the price soon corrected to new lows, validating a support retest from less concentrated holders.

This recurring trend suggests that realized prices often influence short-term price movements, potentially pushing XRP toward $2.58 again. If selling pressure increases, however, XRP may fall to as low as $0.67, which corresponds to the average acquisition level of smaller investors holding between 1,000 and 10,000 tokens. On average, across all wallet segments, a realistic target for XRP appears to be around $1.04.

On the upside, if XRP can firmly break above the $2.58 mark, this could convey renewed confidence from large-scale investors. Such a rally might be reinforced by broader market enthusiasm, especially if favorable developments, such as the introduction of new financial instruments tied to XRP, unfold.

Related: Expert Advice: Sell XRP If You’re Confused

As XRP hovers between critical support and resistance levels, its next move remains uncertain. Traders, investors, and analysts alike are watching closely as the asset straddles pivotal technical and psychological thresholds that could determine its medium-term direction.