Is there a 34% upside potential for XRP? Inverse head and shoulders forming, buying structure becomes a key variable

XRP experienced a technical correction after the previous rally, but the overall price structure remains solid. From a technical perspective, a typical inverse head and shoulders pattern is gradually forming. If a breakout occurs with continued buying support, XRP still has approximately 34% of theoretical upside potential. However, on-chain data indicates that the current demand structure is not entirely “healthy.” The rapid influx of short-term participants may become an uncertain factor during the breakout process.

From a chart perspective, the recent correction is building the right shoulder of the inverse head and shoulders pattern. As long as XRP stays above $1.77, the pattern remains valid. Once the price breaks above the neckline with increased volume, the target range will be between $3.19 and $3.34, corresponding to about 34% upside.

(Source: TradingView)

Technical indicators also show positive signals. The 20-day exponential moving average (EMA) is rising and approaching the 50-day EMA. A confirmed golden cross usually indicates strengthening medium-term momentum. Since EMAs are more sensitive to recent prices, such a cross during a consolidation phase often favors trend continuation rather than a false breakout. Meanwhile, the Money Flow Index (MFI) has been steadily rising since early November. Even during the correction, capital inflow persists, indicating accumulation of buy orders at lower levels.

On-chain data further supports this view. Addresses holding between 1 million and 10 million XRP have been continuously increasing their holdings since early January, with balances growing slightly but steadily. Larger holders (holding between 10 million and 100 million XRP) have been reducing their positions during the rally but are re-accumulating 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.

The real risk comes from short-term buyers. HODL Waves data shows that addresses holding for one day to one week are increasing rapidly, indicating a rise in short-term speculative capital. This can lead to frequent selling pressure near key resistance levels, slowing down the breakout pace.

Regarding key price levels, XRP needs to break above $2.46 and then surpass $2.54 to open the way toward above $3. If it falls below $2.13, the upward momentum will weaken significantly. Support levels below are $1.95 and $1.77.

Overall, XRP is undergoing a genuine accumulation phase with favorable pattern conditions. Whether it can successfully achieve a 34% rally depends on whether medium- and long-term buying support remains dominant and whether short-term capital volatility subsides.