XRP Poised for Breakout as Whales Accumulate, Supply Contracts, and Demand Rises

XRP has been generating a lot of buzz in the cryptocurrency market recently, with many analysts predicting a potential breakout.

As XRP continues to trade within a symmetrical triangle, many analysts are predicting a potential breakout. Here's a closer look at XRP's recent price action and what to watch for in the coming days.

After bouncing back from its low of $1.99 on December 30, 2024, XRP is now trading at around $2.45, showing a gain of over 20%. This impressive recovery has helped XRP outpace rivals like Solana, Tether, and Binance Coin (BNB) to remain one of the top players in the market.

With a market capitalization of $140.23 billion, XRP remains the third-largest cryptocurrency by market cap. However, traders are keeping a close eye on key resistance levels at $2.72 and $2.90, as these levels could signal a move that may push XRP into the coveted $3 territory.

As XRP's total supply continues to decrease and demand rises, the token appears to be setting up for a potential breakout. According to market analyst STEPH IS CRYPTO, XRP's total supply is shrinking, while the demand is increasing. This inverse relationship between supply and price has historically been a strong indicator of an impending bullish rally.

With the total supply of XRP hitting near rock-bottom levels, the token is well-positioned for a price recovery, with some analysts predicting potential gains of 20% to 30% per day in the coming weeks.

Adding to the bullish case for XRP, whales have been making major moves in the market. In the past 48 hours, these large players have collectively purchased a staggering 360 million XRP tokens. This large-scale accumulation suggests that whales are preparing for what they anticipate will be a massive rally, similar to previous bull cycles when such accumulation patterns often preceded sharp price movements.

On-chain data also seems to be painting a bullish picture for XRP. According to Coin Glass, the OI-weighted funding rate stood at 0.0120% as of January 3, 2025, which indicates that traders are favoring long positions. This suggests that there is growing market confidence in XRP's upward price movement.

Moreover, liquidation data reveals that short positions are being liquidated at a much higher rate than long positions. In the latest recorded session, $777,000 worth of short positions were liquidated, compared to just $38,580 in long liquidations. This indicates that bearish traders are being forced to exit their positions at a loss, further contributing to the positive market sentiment.

With the combination of declining supply, increasing demand, whale activity, and strong on-chain metrics, XRP appears to be setting up for a significant breakout. If the token can successfully break through resistance levels at $2.72 and $2.90, it could pave the way for a potential surge towards the $3 mark, or even beyond.

While the cryptocurrency market is always volatile, and past performance is not a guarantee of future results, the current market dynamics surrounding XRP suggest that a major price movement could be imminent.