XRP lost nearly 40% during Monday's session, dropping to its lowest levels since November, only to recover and close up 5% by the end of the day. This volatility was triggered by Donald Trump's announcement of 25% tariffs on Mexico and Canada, which he later temporarily withdrew.

The new-again U.S. president shook global markets, including cryptocurrencies, leaving a notable hammer formation (or bullish pin bar) on XRP's chart, demonstrating how strongly buyers rejected attempts to fall below the psychological $2 level.

In this article, we explore why XRP is going up and whether its price will reach new all-time highs, presenting the latest technical analysis and XRP price prediction for 2025.

Why XRP Fell and Rebounded: Trump's Tariffs Shake Markets

On Sunday, Donald Trump announced 25% tariffs on neighboring Canada and Mexico, with new regulations set to take effect on Tuesday. He also suggested similar fees might be imposed on the EU.

This triggered massive panic across markets, from currencies and commodities to stocks and cryptocurrencies. Bitcoin dropped sharply, testing yearly lows, while altcoins followed suit. XRP led the decline with over 30% losses, while Ethereum (ETH) fell more than 20% and Dogecoin (DOGE) dropped 25%.

However, Trump later backtracked from his initial announcements, stating that tariffs might be suspended for a month if border controls are increased to combat migration.

Why Is XRP Price Up Today?

Following this turmoil, XRP's price first plummeted by almost 40% on Monday to just $1.77, its lowest since November, before ultimately ending the day at $2.7, up approximately 5%.

Although today (Tuesday, February 4, 2025), XRP's price is slightly declining to $2.49, it has managed to recover a significant portion of its sudden losses from the beginning of the week.

The maintained tariffs on China prevented a green candle from forming on today's chart. Trump's actions caused considerable devastation in crypto markets, triggering cascading liquidations of leveraged positions. While losses have decreased, they still total $544 million over the last 24 hours, affecting both short and long positions. XRP saw liquidations of longs worth nearly $19 million and shorts worth almost $13 million.

Major Hammer Formation on XRP Chart: Technical Analysis

A bullish case for XRP in the coming days and weeks is supported by the candlestick formation that appeared on Monday's daily chart. We observed a very long lower wick with a short body, clearly rejecting the lower boundary of the consolidation drawn since November and the psychological $2 level.

This indicates buyers are ready to defend this level and accumulate XRP at local bottoms. Bullish momentum could soon drive the price back to around $2.90, where early December highs are located.

Breaking above this level would open the path to the upper boundary of the current consolidation and XRP's previous ATH at $3.40.

The bullish scenario would be invalidated by a drop below the mentioned $2 support and breach of the 200 EMA. This would signal bears returning to control, potentially pushing XRP's price to $1 or lower.

XRP Price Prediction: DeepSeek AI Predicts XRP to Reach $5

DeepSeek AI, a predictive analytics platform, has entered the conversation on XRP’s outlook for 2025. Using machine learning, sentiment analysis, and economic data, the service aims to offer forward-looking perspectives on various digital assets.

Its projections suggest that XRP could trade between $3.50 and $5.00 by late 2025. The model assigns a 70% chance that a favorable outcome in Ripple’s legal proceedings will bolster investor sentiment and encourage institutional adoption.

Meanwhile, expanded use of Ripple’s On-Demand Liquidity platform by financial institutions could further elevate XRP demand. Broader market sentiment, especially trends tied to Bitcoin’s performance, along with global economic factors, is also expected to shape XRP’s price trajectory.

XRP Price, FAQ

Why is XRP increasing?

XRP’s recent price upswing is largely attributed to a rapid sell-off and subsequent recovery triggered by Donald Trump’s tariff announcements on Mexico and Canada. Despite initially plummeting by nearly 40%, XRP rebounded after Trump indicated a temporary withdrawal of the tariffs, suggesting a more favorable macroeconomic environment than initially feared.

Is it worth investing in XRP now?

The price has bounced back from steep losses, supported by positive technical signals such as the notable hammer candlestick and potential upside targets near $2.90 to $3.40. However, the cryptocurrency market remains volatile, and external factors—such as tariff policies, broader economic conditions, and Bitcoin’s performance—can influence XRP’s price.

Could XRP reach $5?

According to projections from DeepSeek AI, a predictive analytics platform mentioned in the article, XRP could trade in the $3.50 to $5.00 range by late 2025. This forecast assumes a favorable outcome in Ripple’s ongoing legal matters and increased institutional interest through the On-Demand Liquidity platform.

This article was written by Damian Chmiel at www.financemagnates.com.