XRP, the third-largest cryptocurrency by market cap, plunged 26% in 24 hours to $2.12 on February 3, its lowest price since Dec 31, per CoinGecko.

The sell-off mirrors broader crypto market declines triggered by U.S. trade tensions, with Bitcoin (BTC) down 6.8% to $94,290 and Dogecoin (DOGE) crashing 15% to $0.27. Analysts debate whether this is a short-term correction or a deeper bearish shift.

The Crash: Trade Wars and Technical Breakdown

President Donald Trump’s February 1 announcement of new tariffs on China, Canada, and Mexico (effective February 4, 2025) rattled global markets.

Cryptocurrencies, traded 24/7, reacted swiftly. XRP fell to an intraday low of $2.51 on February 4, per CoinMarketCap, while its market cap dropped to $150 billion.

Analyst Timothy Sykes linked the slump to weekend trading volatility and fears of a “wrecked” U.S. stock market. Pseudonymous trader DonAlt warned of further selling pressure on Monday.

Amid the panic, The Coin Republic’s State of the art AI analytics platform XRP price prediction flagged a potential downturn for XRP on January 28 — days before the crash.

The AI model, trained on historical price patterns, on-chain data, and macroeconomic indicators, identified weakening momentum near XRP’s $3.20 resistance level.

The AI’s earlier report noted: “XRP’s RSI (14-day) at 78 signals overbought conditions. Retracement to $2.50–$2.90 likely.” On February 4, XRP hit $2.12, aligning with the prediction. The AI now suggests consolidation near $2.50 could precede a rebound, contingent on holding this support.

XRP Price Prediction: Bullish Continuation or Bear Trap?

XRP’s weekly chart shows a sharp rise from below $2.4 to a monthly high of $3.3 in January. This has been  followed by a sharp pullback to $2.12. Analysts categorize this as a “technical correction” within an uptrend. The $2.10–$2.50 range now acts as a liquidity zone, with $2.10 serving as critical support.

“The $3.00 level is overhead resistance due to supply,” says The Coin Republic’s AI report. “A close above $3.20 would confirm bullish momentum.” Failure to hold $2.10 risks a drop to $1.63–$2.17, per historical imbalance zones.

The crash reflects sector-wide stress. Ethereum (ETH) fell 8% to $2,944, Solana (SOL) dropped 7.3% to $202.90, and Bitcoin briefly dipped below $95,000. Trade tensions overshadowed positive developments, like Ripple’s ongoing efforts to resolve its SEC lawsuit.

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