XRP Price Forecast: Will It Rally or Fall?

XRP has recently regained some momentum, with a notable rebound of over 50% in the past five weeks, reaching $2.42 as of May 16. However, this rise still leaves the cryptocurrency 30% lower than its peak of $3.40 in January 2025. This raises pressing questions: Can XRP sustain its recovery, or are we witnessing the formation of a bull trap? Let’s dive into the latest trends and indicators shaping XRP’s future.

Falling Wedge Retest Points to Potential Recovery

According to renowned chartist CW, XRP is currently undergoing a classic retest of its falling wedge breakout. This technical formation often sees the price return to “retest” the upper trendline of the wedge. If XRP manages to hold above this trendline, it signals strong demand from buyers, suggesting renewed confidence in continuing the upward trend.

CW anticipates that if XRP maintains its position above the falling wedge’s upper trendline, a price surge towards the target of $3.60 is plausible. This target can be calculated by adding the maximum height of the wedge to the breakout point, reinforcing the bullish outlook.

However, if XRP drops below the wedge’s upper trendline, it could invalidate the bullish setup. This scenario would expose XRP to potential declines towards the lower trendline, estimated around $1.75.

Max Pain Scenario: Examining the Bearish Risks

On a more cautious note, XRP appears to be forming an inverse cup-and-handle pattern, which can signal a bearish reversal. This pattern has developed over the last five months, with the rounded “cup” formed from December 2024 to March 2025, followed by a consolidation “handle” into May. The critical support level, known as the neckline, sits near $1.11.

Should XRP drop below this neckline, it could validate the inverse cup-and-handle pattern, potentially triggering a significant correction. The projected downside target could be as low as $0.50, marking nearly an 80% drop from current prices. Supporting this bearish risk are the declining trade volumes during the handle phase and a neutral relative strength index (RSI) hovering around 50.

Whale Activity and Its Influence on XRP Price Dynamics

As of May 15, XRP is currently trading below the $2.58 average paid by its largest holders—whales possessing over 10,000 XRP. Historically, when whale wallets are in the red, there’s often a short-lived bounce back toward their average buy level. Yet this bounce is frequently followed by a broader pullback, as the price tests the average entry points of smaller holders.

For instance, in September 2021, XRP peaked at $1.19, briefly exceeding the whale realized price of $1.01, before plummeting back below $1.10. This pattern suggests that on the path to recovery, XRP could rise towards the whale realized price of $2.58, but significant hurdles remain.

In a worst-case scenario, XRP may descend to $0.67, which aligns with the realized price for the 1,000-10,000 XRP balance cohort. An aggregated analysis illustrates a probable support level around $1.04.

Conversely, a sustained rally past $2.58 would indicate bullish sentiment among whales, potentially fueled by the anticipated launch of spot XRP ETFs in the United States. Such developments could reinvigorate market interest in XRP.

Conclusion: What Lies Ahead for XRP?

As we stand at this crossroads, XRP’s future hangs in the balance. The technical indicators suggest both potential for a rally toward $3.60 and risks of a sharp retreat to $0.50. With whale activity often dictating market trends, it’s crucial to remain vigilant about these larger players’ movements.

Will XRP sustain its recovery, drawing support from whale investors and promising developments in the ETF landscape? Or will it succumb to the bearish pressures hinted at through inverse patterns and historical behavior? As the market progresses, one thing is clear: the next few weeks will be critical for XRP’s trajectory.

Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

For those interested in further exploring XRP’s technical patterns, you might find insights on past crypto market dynamics, the significance of whale investors in cryptocurrencies, and broader trends in the finance sector particularly informative.