XRP Inverse Head and Shoulders Forming, 34% Upside Potential Behind the Battle Between Institutions and Retail Investors

XRP has recently shown a clear inverse head and shoulders pattern after a technical correction, with a theoretical upside of 34%. However, whether this rally can be realized depends critically on the stability of the buying structure. According to the latest news, XRP is currently priced at $2.13, and the positive signals from technical indicators contrast interestingly with the “unhealthy” demand structure indicated by on-chain data.

Effectiveness of the Inverse Head and Shoulders Pattern

From a technical perspective, XRP is currently forming the right shoulder of an inverse head and shoulders pattern during its correction. As long as the price remains above $1.77, the pattern remains valid. A volume breakout above the neckline would target a range of $3.19 to $3.34, corresponding to approximately 34% upside.

Positive Signals from Technical Indicators

The 20-day exponential moving average (EMA) is rising and approaching the 50-day EMA. Once a golden cross is confirmed, it typically indicates strengthening medium-term momentum. More importantly, the Money Flow Index (MFI) has been rising steadily since early November, even during price corrections, indicating continued capital inflow. This suggests accumulation by buyers at lower levels.

The Dual Nature of On-Chain Data

On-chain holdings reveal two key signals. On one hand, addresses holding between 1 million and 10 million XRP have been steadily increasing since early January, with balances growing slightly but consistently. Larger holders (holding between 10 million and 100 million XRP) have reduced their holdings during the rally but have re-entered during the current consolidation, adding about 60 million XRP, worth approximately $130 million. This behavior—buying during consolidation rather than chasing highs—is generally seen as a positive sign for a structural breakout.

Short-term Capital Risks

On the other hand, the real risk comes from short-term traders. HODL Waves data shows that addresses holding XRP for one day to one week are increasing rapidly. The influx of short-term speculative capital can cause frequent selling pressure near key resistance levels, slowing down the breakout pace. This is the core issue behind the statement that the “demand structure is not entirely healthy.”

Key Price Levels and Guidance

Focus for the Next Phase

Whether XRP can successfully realize this 34% increase depends on two key variables. First, whether medium- to long-term buying remains dominant; second, whether short-term capital volatility cools down. Given XRP’s current market rank at 4th with a market cap of $12.913 billion, liquidity is sufficient to support such an increase. However, the stability of trading volume and participant structure is crucial.

According to the latest news, XRP has risen 15.49% over the past 7 days, despite a 6.52% decline in the last 24 hours. This technical correction is actually a necessary part of pattern completion. What to watch out for is a large-scale sell-off by short-term traders at the key resistance levels of $2.46-$2.54, which could delay or even invalidate the pattern.

Summary

XRP is in a genuine accumulation phase, with the conditions for an inverse head and shoulders pattern in place, and on-chain data indicating institutional positioning at low levels. A 34% upside is fully achievable from a technical standpoint, but this is not automatic; it requires sustained support from the buying structure. The rapid influx of short-term capital increases market enthusiasm but also introduces volatility risks. The key follow-up is to observe whether the breakout above $2.46-$2.54 can be sustained and whether trading volume continues to expand. The pattern remains valid, but further market confirmation is needed for certainty.