Trade War Casualty! XRP Erases January Gains as Trump Tariff Threat Spooks Global Markets

XRP’s early-January rally has almost vanished in a matter of days, as Trump’s latest tariff warning shakes global markets.

Ripple’s XRP price traded near $1.89 on Tuesday, down about -5% over the past 24 hours and back to levels seen at the start of 2026.

The XRP price drop followed US President Donald Trump’s new tariff threat against several European countries over Greenland, a move that sparked a sharp pullback across stocks, commodities, and major cryptocurrencies.

The token has now lost more than -20% from its early-January peak around $2.35–$2.40. That run had briefly pushed XRP into the spotlight as one of the strongest performers in the first week of the year.

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Are Trade Tensions and Tariffs Weighing on XRP Price Action?

Market data show XRP opened in 2026 near $1.88 on January 1. It then pushed above $2.00 and almost reached $2.40 by January 5–6 as ETF inflows picked up and institutional traders returned to the market.

The reversal comes as investors weigh Trump’s unexpected decision to link new US tariffs on eight European countries to the ongoing dispute over Washington’s attempt to acquire Greenland.

The threat has revived concerns about global trade friction, pushing traders toward safer assets and pressuring high-beta tokens like XRP.

Trump’s plan to impose a 10% tariff on several European countries from February 1, rising to 25% by June 1 if talks fail, triggered sharp losses across major markets on Tuesday.

US stocks logged their weakest session in three months. The S&P 500 fell about -2.1%, the Dow dropped roughly -1.8%, and the Nasdaq slid around -2.4%.

European markets also ended lower, with London’s FTSE 100 and Germany’s DAX slipping as traders assessed the threat of a wider economic conflict between Washington and its allies.

Data from CoinGlass shows XRP’s derivatives market is pulling back as traders reduce exposure.

XRP futures volume over the past 24 hours has been about $5.7Bn, while spot volume sits just under $1.2Bn.

Total open interest is near $3.35Bn, and around $12.6M in positions were liquidated, pointing to steady but controlled unwinding rather than a deep flush.

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XRP Price Prediction: Is XRP Consolidation a Setup for the Next Major Breakout?

XRP is moving sideways on the weekly chart after a strong multi-month rally. It’s holding above the $2.00 area even after a pullback from recent highs.

The broader trend still leans bullish, with higher highs and higher lows showing that the structure remains intact. Short-term momentum has cooled, but nothing in the chart suggests the trend has reversed.

Market sentiment tells a similar story. The Crypto Fear and Greed Index has slipped into extreme fear, a zone that has often marked major XRP bottoms in past cycles.

Only fools are bearish on $XRP here! pic.twitter.com/U3J5toK8ca

— STEPH IS CRYPTO (@Steph_iscrypto) January 20, 2026

Traders are cautious, but historical patterns show this level has triggered recoveries before.

Sharing his view on the current setup, analyst Steph Is Crypto said, “Only fools are bearish on $XRP here.” He noted that XRP has bounced from similar conditions in earlier rallies.

XRP’s long-term chart shows a classic volatility squeeze followed by a clean breakout, based on analysis shared by crypto analyst Javon Marks. The token spent several years forming a tight “coil” pattern, with lower highs pressing into rising support and volume fading over time.

That pressure eventually released to the upside, sending XRP more than +580% higher to new all-time highs.

After the attached post highlighting $XRP‘s coil nearing breakout points, prices broke out, climbing over 580% to new All Time Highs but today, there is looking to be much more in the tank!

The minimum breakout target for this setup is between $15-20 which from here, is more… https://t.co/t75MdBl2Zk pic.twitter.com/g8O18WSvE9

— JAVONMARKS (@JavonTM1) January 20, 2026

Instead of reversing after the breakout, XRP shifted into consolidation.

Instead of reversing after the breakout, XRP shifted into consolidation. That signals continuation, not weakness.

Current price action also supports that view. XRP is holding above old resistance levels that have now turned into support, keeping the broader bullish trend intact.

Marks says this type of setup has led to extended rallies in past cycles. “After highlighting XRP’s coil nearing breakout points, prices broke out over 580%,” he said.

He added that “there is much more in the tank.” His minimum target sits between $15 and $20, which would mean more than 600% upside from where XRP trades today if the pattern continues to play out.

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Key Takeaways

The XRP price drop followed US President Donald Trump’s new tariff threat against several European countries over Greenland, a move that sparked a sharp pullback across stocks, commodities, and major cryptocurrencies.

Trump’s plan to impose a 10% tariff on several European countries from February 1, rising to 25% by June 1 if talks fail, triggered sharp losses across major markets on Tuesday.