XRP has entered a new correction phase alongside the broader cryptocurrency market, seeing a significant pullback after its recent gains. After reaching an intraday high of $2.46, the fourth-largest cryptocurrency by market capitalization retraced over 6% on January 7, 2025. Despite a brief attempt at rallying during the Asian trading session on January 8, XRP has given back much of its earlier gains, signaling that the market may be entering a consolidation period.

Analyst Highlights Potential Support Levels

In light of the ongoing market downturn, notable analyst Nebraskangooner has shared his insights on the next crucial support levels for XRP. In a tweet on January 7, the analyst suggested that XRP could see further downward movement, possibly correcting by up to 12% from its current level, bringing it to the key $2 support zone. This level has historically been a strong demand area for XRP, acting as a reliable cushion during market corrections.

According to Nebraskangooner, XRP is now consolidating within a falling wedge pattern, a technical formation that often signals a potential reversal after the pattern completes. The analyst pointed out that XRP had experienced a “fake-out” breakout above the pattern on January 3, where it closed above the tip of the wedge. However, following this false breakout, the token has now dropped back inside the wedge, leading to its current decline.

Importance of the $2 Support Zone

The $2 level has been a critical point of support for XRP during previous corrections. For instance, in mid-December 2024, the token saw significant bounces after briefly dipping below this price. The heavy demand at this price range has allowed XRP to stabilize multiple times, preventing further major losses.

Given the current market sentiment, Nebraskangooner believes that XRP could test this $2 support once more before determining its next direction. If the token fails to maintain support at this level, further downside could be in store, with some analysts warning that the price could dip even lower, possibly testing even deeper support zones in the coming weeks.

What’s Next for XRP?

While the market sentiment remains somewhat negative, other analysts, such as Egrag Crypto, believe that XRP is currently in a consolidation phase, oscillating between the $2 and $2.65 range. According to Egrag Crypto, XRP could experience further ranging behavior until it either breaks through the upper resistance of $2.65, which could lead to a rally to $3.55 or $3.77, or falls below the $2 level, potentially testing $1.64 and $1.37.

The price action has been volatile recently, with XRP rising to an intra-month high of $2.50 just a few days ago, but it has since corrected by more than 7%. This fluctuating price action reflects the overall uncertainty in the market and the ongoing broader cryptocurrency correction.

At the time of writing, XRP is trading at $2.30, showing a modest 1.35% increase on the day. Whether XRP can regain momentum and push higher remains uncertain, but analysts are watching key levels closely to determine the next move.

Conclusion

XRP’s current price action indicates a consolidation phase, with analysts pointing to the $2 level as the next major support zone. If XRP fails to hold this level, the token could see further declines, testing lower support areas. However, if the asset manages to stabilize and break through its upper resistance at $2.65, there could be a potential rally ahead. As always, market conditions and broader cryptocurrency trends will play a crucial role in determining the direction of XRP in the coming days and weeks.