Ripple’s XRP recently soared to a record-breaking $3.41 on January 16. This surge has drawn significant attention but has also triggered substantial profit-taking among traders. With selloffs mounting, the token’s rally faces potential reversal.

Profit-Taking Weakens XRP Rally
During Saturday’s trading session, XRP saw spot market outflows totaling $74 million, marking its largest single-day outflow in 30 days. This trend of profit-taking began soon after XRP reached its peak.

Spot outflows often signal that investors are selling or moving assets, reflecting caution or reduced confidence. When such outflows are significant, they can increase selling pressure and push prices lower, potentially creating a downward spiral.
Adding to the concerns, XRP’s daily trading volume has dropped sharply. Over the past 24 hours, the token’s price rose by 2%, but its trading volume fell by 26%, creating a negative divergence.
What Does Negative Divergence Mean for XRP?
Negative divergence occurs when an asset’s price increases while its trading volume declines. This indicates that the rally lacks widespread market support, weakening the uptrend. XRP’s recent surge may not hold, making a price reversal or consolidation likely.

XRP Price Prediction
As of now, XRP is trading at $3.19. If the profit-taking trend continues, the price could drop further to test support at $2.45.

On the other hand, if XRP sustains its current momentum, it could revisit its all-time high of $3.41 and potentially rally beyond that level.