Why Selling XRP in a Downturn is a Strategic Mistake

The recent volatility in XRP's price has sparked renewed debates about whether to sell during a downturn. However, a synthesis of technical and behavioral investment analysis reveals that selling XRP at current levels is a strategic misstep. Historical patterns, consolidation phases, and emotional sell-offs all point to XRP being at a critical accumulation point, not a collapse.

Technical Indicators Signal a Key Accumulation Phase

XRP's price action since 2025 has been defined by a descending channel and a descending triangle pattern, with a crucial support zone between $1.90 and $2.00 acting as a psychological and technical fulcrum. As of late 2025, XRP stabilized around $2.10–$2.20 after testing this support area, with on-chain data showing net outflows from exchanges-a sign of investor accumulation. This behavior aligns with historical precedents where XRP's price spikes followed positive developments in cross-border payment adoption, particularly in Southeast Asia.

Technical indicators further reinforce this narrative. The Relative Strength Index (RSI) has displayed bullish divergence, with lower price lows accompanied by higher RSI lows-a classic sign of weakening bearish momentum. Analysts like Peter Brandt have highlighted a potential double top pattern on the weekly chart, but they caution that a sustained rebound above $2.00 could invalidate the bearish case and trigger a recovery. In short, XRP's technical structure suggests a high probability of consolidation or a breakout, not a terminal decline.

Behavioral Biases Drive Emotional Sell-Offs, Not Fundamentals

While technical analysis provides a structural rationale for holding XRP, behavioral investment theory explains why selling during downturns is often irrational. Retail investors, driven by fear and loss aversion, tend to sell at losses during volatile periods, while large holders (whales) accumulate. This dynamic was starkly evident during the 2020 SEC lawsuit against Ripple, which caused XRP to plummet from $1.80 to below $0.30 as panic selling dominated. Yet, the price rebounded 20% after the 2025 settlement, illustrating how emotional sell-offs often create buying opportunities.

The Crypto Fear and Greed Index underscores this pattern. XRP historically forms bottoms during fear phases (index below 30) and peaks during greed phases (index above 70). Current market sentiment, though bearish, aligns with a fear-driven bottoming process. Sustained buying pressure over the past 90 days, as measured by the Spot Taker Buy CVD metric, also suggests strong institutional and retail conviction in XRP despite short-term turbulence. These behavioral signals indicate that selling during a downturn is more a reaction to emotion than a rational response to fundamentals.

Strategic Case for Holding: Aligning with Both Bullish and Bearish Scenarios

Critically, holding XRP aligns with both bullish and bearish market scenarios. If the $1.90–$2.00 support zone holds, XRP could enter a consolidation phase or break out to the upside, as seen in past recoveries. Even in a bearish case where the support fails, historical volatility patterns suggest rebounds during fear-driven cycles. For instance, XRP's price has historically spiked following regulatory clarity or cross-border payment innovations, such as the 2020–2021 legal developments according to Statista data. These real-world utility-driven catalysts add a layer of resilience beyond technical or behavioral factors.

Moreover, the launch of XRP ETFs post-2025 settlement has institutionalized demand, reducing reliance on retail sentiment. Fibonacci extension analysis and breakout patterns further project a medium-term target of $6.19, contingent on maintaining key resistance levels. Selling XRP at current levels ignores these multi-faceted catalysts and risks missing a potential inflection point.

Conclusion

Selling XRP during a downturn is a strategic mistake because it disregards both technical and behavioral evidence of an accumulation phase. The asset's price structure, coupled with investor psychology cycles and real-world utility, positions XRP as a high-probability candidate for recovery. For investors, patience and a focus on long-term fundamentals-rather than short-term emotional reactions-will likely yield superior outcomes.