Why XRP's Recent Correction Below $2.40 Signals a High-Probability Re-Entry Opportunity

The recent pullback in XRP below $2.40 has sparked renewed interest among technical analysts and institutional investors, positioning the asset as a compelling re-entry opportunity. This correction aligns with critical Fibonacci retracement levels, confluence with key moving averages, and a surge in institutional positioning, all of which suggest a high-probability setup for strategic accumulation. Below, we dissect the technical and macroeconomic factors reinforcing this thesis.

Technical Confluence at $2.40: A Multi-Layered Support Zone

XRP's price action in December 2025 has been shaped by a convergence of technical indicators. The $2.40 level serves as a pivotal support zone where the 50-day moving average (SMA) intersects with the 61.8% Fibonacci retracement level of a prior bullish wave. This confluence is further reinforced by the 200-day SMA, which hovers near $2.57, creating a "support corridor" between $2.40 and $2.57. Analysts note that the 50-day SMA has historically acted as a dynamic support line, and its current alignment with Fibonacci levels amplifies its significance.

Moreover, XRP's price has tested the $2.40 level multiple times, forming a double-bottom pattern from October and November 2025. A clean close above this level could trigger a breakout toward $2.612, a price point aligned with cost-basis clusters and the 0.618 Fibonacci extension. This technical setup suggests that $2.40 is not merely a short-term support but a structural inflection point for the asset.

Institutional Positioning: ETF Inflows and Whale Accumulation Signal Conviction

While XRP's price dipped below $2.40 in early January 2026, institutional demand for the asset remained robust. XRP ETFs absorbed $483 million in inflows during December 2025, outpacing Bitcoin and Ethereum ETFs, which recorded outflows of $1.09 billion and $564 million, respectively. This divergence highlights a shift in institutional capital toward XRP, driven by its post-SEC settlement regulatory clarity and real-world utility in cross-border payments.

Whale activity further underscores institutional conviction. In early 2026, XRP whale transactions surged to a three-month high of 2,802, indicating aggressive repositioning by large holders. This surge coincided with a 22 million token reduction in Korean exchange reserves (Upbit and Bithumb), a pattern historically linked to price appreciation. For example, a similar drawdown preceded XRP's 560% rally in late 2024. These signals suggest that institutional players are accumulating XRP at discounted levels, positioning for a potential rebound.

Fibonacci Retracements and Moving Averages: A Bullish Roadmap

The Fibonacci framework provides a clear roadmap for XRP's potential trajectory. If the $2.40 support holds, the next target aligns with the 1.618 Fibonacci extension at $3.10, a level that could be reached through a multi-stage rally. This projection is supported by the Elliott Wave analysis, which identifies $2.40 as a critical wave-4 correction point before a potential wave-5 surge.

Meanwhile, the 200-day SMA remains a key watchpoint. If XRP reclaims this level, it would signal a shift in the medium-term trend from bearish to bullish. The current gap between the 50-day and 200-day SMAs (approximately $170) reflects a compressed volatility environment, typical of pre-breakout phases in asset cycles.

Macro Risks and Strategic Entry Points

Despite the bullish case, macroeconomic risks persist. Trump's trade policy announcements in late 2025 caused XRP to dip to $2.40 amid broader market uncertainty. However, technical indicators suggest that $2.25 is a secondary support level that, if breached, could trigger a rebound toward $3.40. This creates a risk-managed entry strategy: accumulating at $2.40 with a stop-loss below $2.25.

For long-term investors, the SEC's August 2025 settlement remains a foundational catalyst. By resolving the long-standing regulatory ambiguity, Ripple transformed XRP into an investable asset, attracting institutional allocators seeking diversification beyond Bitcoin and Ethereum.

Conclusion: A Confluence of Technical and Institutional Signals

XRP's correction below $2.40 has created a rare alignment of technical and institutional signals. The confluence of Fibonacci retracements, moving averages, and whale activity, combined with robust ETF inflows, paints a compelling case for strategic accumulation. While macro risks remain, the structural support at $2.40 and institutional positioning suggest that this correction is a high-probability entry point for investors with a medium-term horizon.