- XRP could be gearing up for some serious volatility, making the next few days crucial for anyone watching the asset
- Investors are biding their time and carefully watching for the next ‘Trump pump’
To manage risk, investors often reallocate capital. In light of the volatility of the first quarter, diversification is about to kick off in full force. XRP’s weekly increase of almost 10%, in contrast to Bitcoin’s 5% decline, is a good example of this shift.
For XRP, $3 is still a long way off
Flashback to the fourth quarter, when XRP broke two psychological targets thanks to the Trump trade. When Bitcoin reached $99,000 in late November, the XRP/BTC pair rose on long green candlesticks, posting daily gains of more than 10%.
Now a similar movement appears to be unfolding. A striking green candlestick revealed a 10.24% one-day jump on the XRP/BTC chart, with the MACD turning bullish. With the market still reeling from a recent crash, investors are being cautious. In such a climate, shifting capital from BTC to XRP feels like a smart play.
Source: TradingView
And yet XRP, trading at $2.55, faces a familiar challenge. Despite bullish signals – RSI not yet overbought, whales snap Up 26 million XRP tokens, and the XRP/BTC pair is turning green – it has been difficult to get past $2.60 in the past. Needless to say, hitting $3 can still feel like a challenge.
And with a possible “Trump pump” on the horizon, strategic investors may shift their focus back to BTC in anticipation of higher returns. With such a scenario in mind, XRP’s rise to $3 may have to wait a while.
So proceed with caution
According to AMBCrypto, the continued 10% increase could be driven more by speculation than solid fundamentals.
First, Open Interest (OI) in the Futures market rose to an all-time high of $5.42 billion – well above the $4.29 billion seen when XRP reached its annual high of $2.80 midway through the fourth quarter.
Source: Coinglass
While this seems bullish, the warning signs are hard to ignore. The foreign exchange reserves reached 2.97 billion, historically indicating a potential top for XRP. Adding to the concern, outflow data indicated a lack of retail capital flowing into the market.
If you include whale activity, an even clearer picture emerges. Aggressive accumulation by whales pushed “long” positions to new heights, paving the way for a potential short squeeze. And that’s exactly what happened: $10.79 million worth of shorts were squeezed out in the last 24 hours.
Read Ripple [XRP] Price forecast 2025-2026
However, with retail investment declining, the XRP/BTC pair could soon turn red, signaling potential future trouble. So while that 10% increase may seem tempting, it is not the “dip” many are hoping for.
So another correction could happen before XRP even considers targeting $3. How the market reacts to the coming ‘Trump pump’ could provide the needed clarity. Until then, proceed with caution.