Here’s Why the XRP Price Pump May Be on Thin Ice

XRP started the new year with strong momentum. The token surged more than 30% since January 1, briefly pushing above the $2.30 level before cooling off. At the time of writing, the XRP price is trading around $2.25 after a modest pullback.

The move came during a broader risk-on shift in crypto markets, helped by geopolitical headlines and renewed interest in payment-focused assets. We previously reported how developments around Venezuela, including sanctions pressure, oil exports, and alternative settlement routes, brought XRP back into the conversation as a potential cross-border payments rail. That narrative helped fuel optimism, but recent data suggests the rally may not be as solid as it looks on the surface.

Why the XRP Rally Looks Fragile

As per analyst Dom, who has more than 34,000 followers on X, XRP’s recent price jump was not driven by aggressive spot buying. Instead, his analysis of cumulative volume delta (CVD) across major exchanges shows a different picture.

Dom points out that most spot exchanges are net negative on taker volume. In simple terms, that means sellers were still dominant during the rally. Normally, strong and sustainable price moves are backed by buyers aggressively lifting offers. That did not happen here.

Source: X/@traderview2

What pushed the XRP price higher was thin liquidity on the sell side. With fewer sell orders sitting on the order book, price was able to move up quickly even without strong demand. This type of move can happen fast, but it also carries risk. If sellers step back in or if liquidity normalizes, price can retrace just as quickly.

Dom notes that this kind of growth is not ideal unless bids start chasing price higher and supporting the move. Without that follow-through, rallies built on low liquidity tend to fade.

What This Means for XRP Short Term

This does not automatically mean XRP is about to collapse. The broader trend remains constructive, and XRP is still holding well above key psychological levels near $2.00. Futures activity has also picked up, showing that traders are re-engaging after December’s risk-off period.

However, the structure of the move matters. If XRP continues higher while spot buying remains weak, volatility could increase. A healthy pullback that attracts real demand would actually strengthen the bullish case. On the other hand, continued upside without buyer support increases the risk of sharper corrections.

For now, XRP’s price action reflects confidence returning to the market, but Dom’s data is a reminder that not all pumps are created equal. Whether this rally turns into a sustained trend will depend on one thing: real buyers stepping in to support price, not just thin order books doing the work.

In the coming days, traders will be watching closely to see if demand catches up to price—or if this New Year surge starts to lose its footing.

Read also: How Much XRP Do You Really Need for Financial Freedom?