As 2025 begins, XRP, Ripple Labs’ native token, is off to a strong start with impressive performance. However, some wonder if this performance is driven by bullish price action or a shift in market sentiment. In this article, we will examine the factors behind XRP’s recent rally and determine whether this is an ideal time to invest in the token.
Why is XRP rallying?
Data from on-chain analytics firm CryptoQuant shows a significant drop in XRP reserves on exchanges. What does this mean? It indicates that whales and long-term holders withdrew XRP tokens from the exchanges before the rally started, indicating significant accumulation of XRP.
According to CryptoQuant According to data, whales have withdrawn 20 million XRP tokens from Binance, reducing the exchange’s reserve from 2.94 billion to 2.92 billion in the past seven days. Moreover, the exchange has witnessed a significant outflow of 519.82 million XRP tokens. This underlines the extent of accumulation by long-term holders over the same period.
These on-chain metrics explain the other factors behind XRP’s recent rally. However, this data is limited to Binance, which hosts the majority of crypto users compared to other exchanges. In addition to centralized exchanges, volume on decentralized exchanges (DEXs) seems to be constantly increasing, which is also a positive sign for XRP holders.
XRP current price and upcoming level
Currently, XRP is trading around $2.40, after rising more than 4.65% in the last 24 hours. During this period, the remarkable price rally and breakout led to a surge in trader and investor participation, resulting in a 35% increase in trading volume.
According to expert technical analysis, XRP appears bullish after breaking a flag-and-pole price action pattern, although it currently appears to be retesting the breakout level. Based on recent price action and historical momentum, if XRP continues to hold the support above $2.30, it could rise 80% to reach the $4.40 level going forward.
The combination of bullish on-chain metrics, growing DEX volumes, and strong technical patterns positions XRP as a promising investment for 2025. However, investors should remain cautious and keep an eye on key support levels, especially around $2.30.