Analyst Flags XRP as Market’s ‘Best Risk/Reward’ Play as Token Tests Critical $1.60 Support

• Asymmetric Setup: Analyst Scott Melker identifies XRP as a high-conviction trade, citing a "clean" setup where potential upside heavily outweighs downside risk.

• Technical Floor: The token is defending a key weekly support band at $1.55–$1.60, a level that previously acted as a launchpad for the 2024 breakout.

• Defined Parameters: A tight invalidation level below $1.50 offers traders a managed exit, while a successful bounce could target overhead supply near $2.00 and $2.60.

XRP is teetering on a critical technical juncture, trading near the $1.60 handle after a significant correction from its 2025 highs. While the recent pullback has shaken out weaker hands, prominent crypto analyst Scott Melker argues the token now presents one of the most compelling risk/reward propositions in the current market.

Melker, known in trading circles as "The Wolf Of All Streets," highlights the current consolidation as a textbook opportunity for traders seeking defined risk.

"For traders, this is about the best risk/reward you get on an asset," Melker noted in a January 31 post on X (formerly Twitter). He pointed to the "huge air pocket" beneath current support, implying that while a breakdown could be steep, the clarity of the level makes it "easy to cut loose with a small loss if support fails."

The $1.60 ‘Line in the Sand’The technical thesis hinges on the $1.55 to $1.60 zone. This area is not merely psychological; it represents a structural "SR flip" (support/resistance flip), coinciding with the midpoint of the breakout rally that initiated in November 2024.

Price action suggests a potential bottoming formation. XRP briefly wicked down toward $1.50 before closing January above the $1.60 threshold—a move technical traders often interpret as a "liquidity sweep" designed to clear out over-leveraged long positions. If buyers step in to defend this floor, the structure remains bullish.

Volatile History, Clear StructureThe current setup follows a period of extreme volatility. After months of sideways consolidation throughout 2023 and most of 2024, XRP staged a breakout from the $0.50–$0.60 range in November 2024. That move ignited a parabolic run, culminating in a peak of $3.66 in July 2025.

However, the subsequent correction has been punishing. Repeated failures to sustain momentum above $3.50 signaled buyer exhaustion, triggering a rotation that has now round-tripped price back to this pivotal $1.60 support tier.

Calculated Upside vs. Managed DownsideFor traders looking to execute on Melker’s thesis, the trade parameters are strictly defined:

• The Risk: A stop-loss placed between $1.45 and $1.50 limits exposure, ensuring that capital is preserved if the market structure breaks.

• The Reward: A successful defense of support would likely see bulls target $2.00 as an initial objective, followed by heavier overhead supply zones between $2.50 and $2.60, with major resistance looming near $3.00.

The Macro CaveatWhile the chart setup is clean "on paper," execution requires market confirmation. The analysis notes that a "support hold without visible buying on the tape is fragile."

Traders will be watching for volume anomalies to confirm the bounce. Furthermore, XRP does not trade in a vacuum; its ability to pivot higher will heavily depend on broader U.S. market liquidity and the prevailing risk appetite across the cryptocurrency sector.