Trade Tensions Weigh on Crypto Market: XRP Eyes $1.85 Support Amid Risk-Off Sentiment

A significant market correction is underway in cryptocurrency as geopolitical concerns reshape investor behavior. XRP, one of the market’s notable performers, has come under pressure following escalating trade tensions between the United States and the European Union, declining 3.7% over the past 24 hours to trade near $1.97. The altcoin briefly tested the $1.85 level—a key technical floor established in early January—signaling that the broader risk sentiment shift is weighing heavily on digital assets.

The underlying catalyst stems from escalating trade policies, with US tariffs potentially rising from 10% on imports effective February 1 to 25% by June on NATO allies including Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands, and Finland. These trade measures have created a risk-off environment across financial markets, causing investors to reassess their exposure to speculative assets like cryptocurrency.

Geopolitical Trade War Triggers Broad Market Selloff

Bitcoin faced comparable headwinds, retreating to around $92,000 as the trade war narrative intensified. However, what’s particularly notable is how the cryptocurrency market is underperforming relative to other risk assets during this uncertain period. According to analysis from Presto Research, while the US-EU trade tensions have dominated sentiment, other equity indices like the KOSPI are holding relatively steady or advancing higher.

“The crypto market shows distinct weakness compared to broader financial markets,” explained Min Jung, associate researcher at Presto Research. “While trade war concerns represent the primary sentiment driver, the fact that equities remain resilient while crypto lags suggests investors are actively rotating away from digital assets toward traditional risk vehicles. This divergence indicates crypto-specific headwinds persist beyond macro concerns.”

Exchange reserves data supports this narrative—increasing inflows suggest investors are liquidating positions and exiting the market, reducing aggregate exposure to cryptocurrency. This institutional and retail rotation away from digital assets creates additional selling pressure independent of the trade tensions.

XRP Technical Breakdown Signals Further Market Weakness

From a technical perspective, the market structure remains decidedly bearish. Over the past seven days, XRP has lost approximately 4% of its value, placing it among the worst performers in the top 10 cryptocurrencies. The 4-hour chart exhibits multiple bearish signals: the Relative Strength Index (RSI) sits at 40, well below the neutral 50 level, indicating sustained selling pressure and momentum favoring sellers.

The MACD indicator crossed into negative territory on Thursday, adding technical confluence to the bearish thesis. Momentum remains with the bears, suggesting the path of least resistance points downward in the near term. If selling persists, XRP could retest Monday’s intraday low of $1.8533, with a subsequent breakdown potentially exposing $1.80 as the next support level.

Recovery Scenario: Conditions for Market Stabilization

The more constructive case assumes the recent swing low holds as a floor. Should the market find its footing, XRP could recover toward the $2.06 resistance level in coming days. However, the $2.20 resistance presents a significant hurdle—multiple failed attempts in recent weeks suggest that level is being closely watched by sellers.

For cryptocurrency to stabilize, either trade tensions must ease or broader market sentiment must shift from risk-off to risk-on. Without a catalyst to reverse the current trade war dynamic, the cryptocurrency market will likely remain under pressure relative to other asset classes.