XRP is now trading just above the $2 level again, after rallying in early January briefly executed its price action in the $2.40 range. The withdrawal has been kept under control so farwith prices remaining above previous resistance, but which has now turned into short-term support.
A technical analysis shared by crypto analyst Bird on The focus of this outlook is on XRP’s reaction to the US dollar index and what the next step could mean for the cryptocurrency.
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How DXY Weakness Has Always Unlocked XRP Rallies
Bird analysis is based on the US Dollar Index, or DXY, and its inverse relationship with XRP during key phases. The chart accompanying his post pointed to three previous periods, around 2017, 2021 and 2024, where persistent dollar weakness coincided with aggressive upward moves in XRP.
In each of these cycles, red candles on the DXY chart led to a loss of dollar strength, while XRP responded with a strong upward expansion soon after. This recurring pattern means that XRP’s biggest moves tend to follow macro shifts, not just events related to XRP. When the dollar’s dominance fades, capital always turns into crypto assets, and XRP is one of the main beneficiaries of that transition.
Interestingly, the current setup shows that DXY has returned to a similar structural zone as before previous rollovers. As shown in the chart below, the DXY is now trending down.
US dollar index, XRPUSD. Source: @Bird_XRPL On X
XRP to new all-time highs?
The first highlighted phase covers the cycle from late 2017 to early 2018, when a weakening dollar backdrop in line with XRP’s rally culminated in the cycle peak in the mid-$3 range.
A similar relationship occurred around the 2020-2021 period, where dollar softness was followed by XRP rising to $1.90 at the cycle top. The last was in the first half of 2025, culminating in XRP reaching its current all-time high of $3.65 in July.
The important context is why the current moment is a decision point. At the time of writing, the DXY is around 99, and from here it can either move lower and start printing red candles again, or catch a bid and print green.
If DXY starts printing red candles again and reversing, the pattern Bird points to suggests the macro backdrop becomes supportive of another strong XRP leg higher, which is the reason for a new all-time high above $3.65. could come into view in the coming months.
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If DXY prints green and strengthens, that would be the opposite signal: it could tighten liquidity conditions and keep XRP’s price action in consolidation around $2 before a breakout attempt. Either way, the dollar’s next move will be a signal of what comes next.
Featured image from Unsplash, chart from TradingView