XRP's Critical Juncture: Can Bulls Defend $2 to Avoid a $1.20 Collapse?

XRP, the digital asset underpinning Ripple's blockchain network, now faces a pivotal test as it hovers near the $2 psychological threshold. With institutional demand and technical indicators pointing to both resilience and fragility, the market is at a crossroads. This analysis examines the short-term risks and institutional dynamics shaping XRP's trajectory, offering a roadmap for investors navigating this volatile juncture.

Technical Vulnerability: A Fragile Defense at $2

XRP's price action in late 2025 has been marked by sharp volatility, with the $2.20–$2.30 range emerging as a battleground for bulls and bears. A recent 7.3% decline from $2.48 to $2.30 broke key psychological support, triggering a technical breakdown. This selloff coincided with a 46% surge in trading volume, signaling large-cap token distributions and derivatives liquidations. While a brief rebound to $2.31 in mid-November suggested renewed buying interest, the failure to sustain above $2.28 raises concerns about the asset's structural weakness.

Technical indicators further complicate the outlook. The Stochastic RSI, which historically aligned with major rallies in 2024 and mid-2025, now shows bearish divergence. Meanwhile, the Relative Strength Index (RSI) remains below equilibrium, reflecting ongoing selling pressure according to recent analysis. A critical support level at $1.90 has become a focal point: the activation of the TD Sequential buy signal at this level suggests waning downward momentum according to technical indicators. However, a breakdown below $1.90 could accelerate a move toward $1.20, a level last seen during the 2022 market downturn.

Institutional Sentiment: Contradictory Signals Amid ETF Hype

Institutional activity paints a mixed picture. On one hand, XRP ETFs have injected over $700 million in assets by late November 2025, creating a structural liquidity sink that stabilizes the $2.20 trading range. Franklin Templeton's XRPZ and Grayscale's GXRP, for instance, recorded combined inflows of $164 million, reflecting aggressive institutional demand. Open interest in XRP derivatives has also surpassed $4.3 billion, with institutional wallets holding 10 million+ XRP expanding their positions by 8% since October.

Yet, these bullish signals are offset by on-chain selling pressures. Long-term holder balances among 1–3-year wallets have declined, indicating reduced conviction. Approximately 1.5 billion XRP were sold by large holders in the past month, exacerbating downward pressure. Active addresses on the XRP Ledger have plummeted to 19,200-a 95% drop from June 2025's peak of 500,000-highlighting weak network engagement. This divergence between ETF-driven accumulation and on-chain distribution underscores the fragility of institutional support.

The Interplay of Technical and Institutional Forces

The coming weeks will hinge on whether XRP can reassert control above $2.20–$2.24 resistance clusters. A successful defense would validate the structural support provided by ETF inflows and the TD Sequential buy signal at $1.90. Conversely, a breakdown below $1.90 could trigger a cascade of stop-loss orders and force institutional players to reassess their exposure.

Macro-level risks further amplify uncertainty. While the U.S. spot ETF launch has improved liquidity, broader market conditions remain bearish, with XRP trading below key exponential moving averages. Large-lot trades on derivatives desks have already accelerated declines, suggesting that institutional selling could intensify if sentiment shifts.

Conclusion: A High-Stakes Reckoning

XRP's ability to defend the $2 level will determine its near-term fate. Technically, the asset remains vulnerable to a breakdown toward $1.20 unless bulls can reestablish dominance above $2.20. Institutionally, while ETF inflows provide a buffer, they are insufficient to counteract the selling pressures from long-term holders and derivatives markets. Investors must closely monitor volume dynamics, open interest trends, and on-chain activity to gauge whether the $1.90 floor holds-or collapses into a deeper bearish spiral.