XRP (XRP) fell as much as 7.25% to around $1.84 on Tuesday after President Donald Trump threatened to impose tariffs on some European countries in a dispute linked to Greenland.
Trump’s threat of Greenland tariffs has shaken risk sentiment
Greenland is considered an autonomous region within the Kingdom of Denmark, and Trump’s recent statements have revived a geopolitical dispute by pressuring Denmark and its European supporters over the island.
For markets, the immediate result has been increased odds of a broader trade fight, potential retaliation, and political uncertainty, conditions that typically hit “risk” assets like cryptocurrencies first.
However, the initial XRP tranche did not hold up. The symbol rebounded quickly and issued a long bullish wick, indicating this XRP buyers absorbed the sell-off Below the $1.90 area. This pattern is similar to the November 2025 downside rejection that preceded a roughly 25% rebound, leaving the case open for another rally if macro pressures fade.
Part of the recovery may have reflected a return to risk appetite associated with a pending US Supreme Court ruling on some… Trump’s previous definitionswith a decision likely as soon as Tuesday. This backdrop has fueled speculation that tariff pressures may ease rather than intensify.
“My working assumption is that a way out of these threats will soon be found,” said Michael Brown, chief research strategist at Pepperstone, adding that if any European retaliation remained mostly rhetorical, he would treat declines in risk assets as buying opportunities.
However, Francisco Simón, head of European strategy at Santander Asset Management, emphasized the main catalyst:
“The key element to monitor in the coming days is whether the message will be translated into formal actions or remain purely rhetorical.”
The descending channel maintains a 20% decline in XRP
Even after the rebound, XRP continues to trade within a bearish channel, meaning that the larger trend has remained lower despite the sharp bounce in the opposite direction. In simple terms, the market is still producing lower highs and lower lows.
XRP is also facing a heavy resistance range from its moving averages. The 50-day moving average is near $2.07, while the 200-day moving average is near $2.31 – levels that often act like ceilings during downtrends. Meanwhile, the daily RSI is in the mid-40s, indicating that momentum is still weak rather than bullish.
If the dispute in Greenland develops into actual tariff measures and exacerbates risk appetite, XRP could slide towards the lower channel trend line near $1.60, about 20% below current levels, by early February.
The bearish setup may weaken if XRP crosses the upper trend line of the channel and sustains reclaiming the $2.07-2.31 area.
