Technical indicators across multiple timeframes point to structural weakness despite brief breakout attempts above $2.05 resistance during overnight trade.
News background
- XRP continues to face pressure as its weekly performance deteriorates to -7.4%, adding to the multi-session downtrend that dominated early December.
- Despite continued price weakness, institutional demand remains strong via US spot XRP ETFs, which have attracted $906 million in net inflows since launch – with no outflow days recorded.
- Meanwhile, social sentiment has collapsed to extreme fear readings matching October lows, with Santiment reporting the highest level of bearish commentary in over five weeks.
- Historically, such extremes preceded short-term recoveries, including the November 21 recovery.
- On-chain data shows mixed positioning: 6-12 month holders significantly reduced exposure, falling from 26.18% to 21.65%, while long-term ETF-driven demand continues to accumulate quietly in the background.
Technical Analysis
- XRP’s attempt to break higher was initially successful, with the price pushing through $2.05 on a 68% above average volume increase at 03:00. The breakout produced a strong rally to $2.07, but the move lacked follow-through. Declining volume in the retracement revealed fading momentum and sellers quickly regained control.
- A persistent descending channel has now formed on the 60-minute chart, with successive lower highs and tighter price compression. This structure reflects an orderly trend-driven decline rather than a panic liquidation.
- Each bounce has been met with distribution, especially near $2.04-$2.05 – a zone that now doubles as immediate resistance.
Momentum oscillators are trending down across intraday timeframes, while the weekly TD Sequential indicator is quietly flashing a potential reversal signal. - This creates an environment of short-term weakness paired with early long-term stabilization signals.
Summary of price action
- XRP is trading within a $0.0563 range (2.8%) and moved between $2.02 and $2.07 before closing near $2.032.
- The breakout to $2.07 was fueled by a volume increase of 44.99 million. (68% above the SMA), but the rally went all the way back as volume fell.
- The 60-minute structure shows XRP falling from $2,040 to a support test of $2,029, with 1.08 million. volume below the low – clear evidence of institutional distribution rather than opportunistic buying.
- XRP is now consolidating around $2,030 where it is important to hold this pivot to avoid deeper testing of the $2,020-$2,025 zone.
What traders should know
- XRP’s short-term trajectory remains fragile as technical forces overwhelm otherwise supportive fundamentals like ETF inflows and long-term accumulation.
- A retracement of $2.035 is required to restore intraday momentum, while a clean break back above $2.05 would be needed to invalidate the descending channel.
- If $2,030 gives way, traders should anticipate a retest of $2,020-$2,025, with psychological support at $2.00 serving as the last line before a broader downside opens.
- Sentiment is deeply negative, which has historically been in line with early reversal setups, but until a technical trigger emerges, the prevailing trend remains down.
