XRP (XRP) fell as much as 7.25% to around $1.84 on Tuesday after President Donald Trump threatened tariffs on certain European countries over the Greenland dispute.
Trump's threat to impose tariffs on Greenland shook risk sentiment. The descending channel is keeping a 20% decline in XRP under control
XRP/USDT every day price chart. Source: TradingView
Trump's threat of tariffs on Greenland shook risk sentiment
Greenland is a self-governing territory throughout the Kingdom of Denmark, and Trump's recent comments have reignited a geopolitical dispute by pressuring Denmark and European supporters over the island.
For markets, the immediate takeaway was that the likelihood of a broader trade fight, potential retaliation and political uncertainty has increased – conditions that typically hit “dangerous” assets like cryptocurrencies first.
Daily TOTAL crypto market cap chart. Source: TradingView
However, XRP’s initial decline didn’t last. The token quickly recovered and formed an extended bullish wick, signaling that XRP buyers were in a position to absorb the sell-off below the $1.90 area. The pattern was much like a downward rejection in November 2025 that preceded a rally of about 25%, leaving open the prospect of one other recovery rally as macroeconomic stress subsides.
Part of the recovery could possibly be resulting from a return of risk appetite tied to an impending U.S. Supreme Court ruling on a few of Trump's previous tariffs. A call needs to be made as early as Tuesday. This background fueled speculation that tariff pressure could ease slightly than increase.
Source: Kalshi
“I expect a way out of those threats can be found soon,” said Michael Brown, senior research strategist at Pepperstone, adding that he would view dips in risk assets as buying opportunities if European retaliation remained largely rhetorical.
Nevertheless, Francisco Simón, head of European strategy at Santander Asset Management, emphasized the decisive trigger:
“The key element to look at in the approaching days is whether or not the message translates into formal motion or stays purely rhetorical in nature.”
The descending channel is keeping a 20% XRP decline under control
Even after the recovery, XRP continues to trade inside a descending channel, meaning the larger trend stays bearish despite strong countertrend rallies. To put it simply, the market continues to be producing lower highs and lower lows.
XRP/USDT every day price chart. Source: TradingView
XRP can also be facing a decent resistance band from its moving averages. The 50-day EMA is around $2.07, while the 200-day EMA is around $2.31 – levels that always act as ceilings during downtrends. Meanwhile, the every day RSI is within the mid-40s, suggesting that momentum stays weak slightly than bullish.
If the Greenland dispute develops into actual tariff measures and risk sentiment deteriorates, XRP could slide toward the channel's lower trendline near $1.60 by early February, about 20% below current levels.
The bearish setup would weaken if XRP breaks out above the upper trendline of the channel and reclaims the $2.07-$2.31 zone.
