XRP is now back to trading just above the $2 level after rising in early January briefly executed its price action in the $2.40 range. Withdrawal so far it has been controlledwith the price holding above former resistance which has now turned into short-term support.
Technical analysis shared on X by cryptoanalyst Bird suggested that conditions are now good for a familiar macro setup that preceded XRP’s biggest historical gains. The focus of this perspective is on XRP’s reaction to the US Dollar Index and what its next move could mean for the cryptocurrency.
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As DXY weakness always unlocked XRP rallies
Bird analysis is based on the US dollar index or DXY and its inverse relationship with XRP during important phases. A chart accompanying his announcement pointed to three previous periods, around 2017, 2021, and 2024, where persistent dollar weakness coincided with XRP’s aggressive bullish moves.
In each of those cycles, red candles on the DXY chart saw the dollar lose strength, while XRP responded with a strong upward expansion soon after. This repeating pattern means that XRP’s biggest moves tend to follow macro changes, not just XRP-related events. When the dominance of the dollar disappears, capital always turns to crypto assets, and XRP has been one of the primary beneficiaries of that transition.
Interestingly, the current setup shows that the DXY has returned to a similar structural zone seen before the past reversals. As shown in the chart below, DXY is now trending down.
US dollar index, XRPUSD. Source: @Bird_XRPL on X
XRP to new all-time highs?
The first prominent phase spans the cycle from late 2017 to early 2018, when the backdrop of a weakening dollar associated with the rise of XRP peaked in the mid-$3 range of the cycle.
A similar relationship emerged around the 2020-2021 window, where dollar softness was accompanied by XRP’s rise to $1.90 at the top of the cycle. The most recent was in the first half of 2025, culminating in XRP reaching its current all-time high of $3.65 in July.
The context of why electricity is important the moment is the point of decision. At the time of writing, DXY is around 99, and from here it can either turn lower and start printing red candles again, or catch a bid and print green.
If the DXY starts printing red candles again and turns over, the pattern Bird is pointing to suggests that the macro backdrop is becoming supportive for another strong XRP leg up, which is the reason for a new all-time high above $3.65 could come into view in the next few months.
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If DXY turns green and strengthens, it would be the opposite signal: it may tighten liquidity conditions and keep XRP’s price action limited to a consolidation around $2 before any breakout attempt. Either way, the dollar’s next move will signal what’s to come.
Featured image from Unsplash, chart from TradingView
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