XRP Forms Gravestone Doji Pattern: What Traders Should Know About This Technical Signal

XRP has recently caught technical analysts’ attention as it appears to be developing a gravestone doji formation on its weekly timeframe. This candlestick pattern—characterized by an opening and closing price at virtually identical levels with an extended upper shadow—traditionally signals potential market indecision transitioning into bearish sentiment.

Understanding the Current Market Backdrop

The recent price action paints an interesting picture. XRP surged to $2.41 on January 6 before entering a five-day correction phase. As of the latest data, the asset is trading around $2.12, showing modest gains of 0.28% over the past 24 hours, though it remains down 2.07% on a weekly basis.

Notably, trading activity has significantly contracted—24-hour volumes have compressed to $102.72 million, reflecting reduced participant engagement in the market. This decreased liquidity during a pattern formation often amplifies the significance of technical signals.

The Gravestone Doji Explained

A gravestone doji emerges when price action creates a candle with minimal body but substantial upper wick. The pattern gains importance when appearing after extended uptrends, as it typically suggests market participants failed to sustain higher prices. Rather than indicating bullish continuation, it often precedes corrective moves or reversals. Many traders view this as a cautionary signal warranting close observation.

ETF Outflows Add to Market Uncertainty

Recent data revealed that U.S. spot XRP ETFs experienced their first net outflow event since November—approximately $40.8 million withdrew on January 7. This marked the end of a notable inflow streak that had supported the asset through its rally phase. Combined with the gravestone doji formation, this metric suggests potential cooling of institutional interest.

Key Price Levels to Monitor

XRP is currently trading within a defined range spanning $1.77 to $2.41. The immediate support level sits around $2.00 (the 50-day moving average), which traders will watch to determine if bullish momentum can stabilize. Should this level hold and the pattern reverse, the next significant resistance emerges at $2.56, which aligns with another key moving average.

A decisive break above $2.56 could potentially open pathways toward $3.00 and $3.50. Conversely, a failure to defend current support levels could invite further downside testing.