XRP Shows Consolidation Signs as Risk-Adjusted Returns Remain Weak

TLDR

• XRP remains below $1.90 as market consolidates, showing weak buying momentum.
• Risk-adjusted returns suggest XRP is in a consolidation, not a trend formation.
• XRP is 25% below its 200-day moving average, indicating structural weakness.
• Recent attempts to reclaim higher levels failed, signaling cautious market behavior.

XRP’s market behavior continues to indicate a consolidation phase rather than the beginning of a new uptrend. As of late January 2026, XRP’s price has slipped below the $1.90 mark, signaling ongoing weakness. The price has shown weak momentum, with recent recovery attempts failing to gain traction. This suggests that the market is still in a corrective phase, with no clear signals of a trend reversal.

Market Conditions Reflect Consolidation

XRP’s current price action highlights a market stuck in what can be described as a cautious equilibrium. Despite some recent attempts at stabilization, these movements have lacked follow-through.

According to a report from CryptoQuant, XRP’s price continues to trade significantly below its long-term moving averages. At the time of writing, XRP is trading around $1.89, approximately 25% below its 200-day moving average, which stands near $2.54.

This gap between the current price and the long-term moving average underscores the ongoing structural weakness in the market. Historically, sustained bullish movements only occur after the price reclaims and holds above the 200-day moving average. However, with XRP still well below this level, the market appears to be in a corrective range, where rallies are more likely to face resistance rather than extend into an uptrend.

Risk-Adjusted Metrics Point to Consolidation

The risk-adjusted return metrics offer a clearer picture of XRP’s current market condition. The 30-day Sharpe Ratio stands at just 0.034, indicating that recent returns have not provided adequate compensation for the risks assumed.

This low ratio signals that the market lacks directional conviction, a typical feature of consolidation phases where volatility tends to compress. The market’s movement is less driven by strong buying or selling momentum and more responsive to liquidity shifts.

Further, the Sharpe Z-Score has turned positive at approximately 0.70, suggesting that the return quality has improved slightly compared to XRP’s recent history. However, this is still well below the threshold needed to signal a strong trend formation. These metrics, combined with the relatively low Sharpe Momentum score of 0.03, suggest a market that is gradually building a base, not one experiencing an impulsive rally.

XRP Remains Below Key Moving Averages

XRP’s price continues to remain below key moving averages, further indicating a lack of upward momentum. The 50-day moving average, which is trending downward, serves as dynamic resistance.

Both the 100-day and 200-day moving averages are also positioned above the current price, reinforcing a bearish market structure. As long as XRP fails to reclaim the $2.20-$2.30 range and holds below the 50-day moving average, it is unlikely to enter a sustained recovery phase.

XRP has shown a pattern of lower highs and lower lows since the sharp drop in early October. These price movements confirm that selling pressure is still dominating the market. Attempts to break through key resistance levels, such as $2.10-$2.20, have failed quickly, indicating weak buyer interest. Overall, this suggests a market more inclined toward distribution and consolidation rather than trend formation.

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