XRP: Is This a High-Probability Reversal Setup Amid a Broad Altcoin Downtrend?

The cryptocurrency market in late 2025 has been defined by a stark divergence between Bitcoin's dominance and the struggles of altcoins. While Bitcoin has consolidated its position as a safe-haven asset amid macroeconomic uncertainty, altcoins like XRP have faced relentless selling pressure. Yet, beneath the surface of this bearish narrative, XRP's technical and on-chain dynamics suggest a high-probability reversal setup-a contrarian opportunity for investors willing to navigate the volatility.

Technical Catalysts: TD Sequential and Fibonacci Support Levels

The TD Sequential indicator, a tool developed by Tom DeMark, has emerged as a critical focal point for XRP traders. On the weekly chart, a buy signal has formed after nine consecutive bearish candles marked a prolonged corrective phase. This setup historically precedes price stabilization or upward shifts, particularly when aligned with key support levels according to analysis. XRP's current price near $2.00-a psychological and Fibonacci support level-has shown resilience, with swift rebounds indicating active buying interest according to technical indicators.

The Fibonacci retracement framework further strengthens the case for a reversal. XRP has tested the $2.00 level multiple times, with a breakdown below this threshold exposing it to the $1.90 support zone (June 2025 lows) and the $1.61 level (April 2025 lows) as data shows. A sustained close above $2.00 would not only revalidate the Fibonacci floor but also align with the 21-month EMA (around $1.83–$1.90), a critical technical barrier as analysts note. Analysts argue that a reclamation of $2.00 could trigger a short-term rally toward $2.50, leveraging historical pattern outcomes according to market analysis.

Contrarian Sentiment: Extreme Fear and Oversold Metrics

The Crypto Fear and Greed Index currently sits at 23, a level historically associated with market bottoms as reported. This extreme fear, coupled with XRP's underperformance relative to Bitcoin, suggests a potential inflection point. On-chain data corroborates this narrative: while retail investors have offloaded 90 million XRP in two weeks according to market data, mega whales (holding 100 million–1 billion XRP) have accumulated 1.27 billion tokens since mid-October, worth $3.15 billion according to financial reports. This accumulation contrasts with broader sell-off pressure and hints at strategic positioning by long-term holders.

The Network Value to Transactions (NVT) ratio for XRP has also declined, signaling undervaluation relative to network activity according to market analysis. A falling NVT ratio typically reflects growing transaction volume outpacing market capitalization, implying that XRP's utility is outperforming speculative pricing. This divergence between fundamentals and price action is a classic contrarian signal.

Institutional Tailwinds and ETF Dynamics

Despite the bearish backdrop, institutional demand remains robust. U.S. spot XRP ETFs have recorded cumulative net inflows nearing $990.9 million, with over $1.2 billion in assets under management according to market reports. These inflows reflect strategic accumulation rather than speculative frenzy, as evidenced by the 400 million XRP locked in ETF custody vaults, reducing available supply according to on-chain data. This institutional repositioning could act as a stabilizing force if XRP's price action confirms a reversal.

Broader Market Context: Bitcoin Dominance and Altcoin Weakness

Bitcoin's dominance has surged to 67.0057% as of October 2025, reflecting capital rotation into high-liquidity assets amid risk-off sentiment according to market data. This trend has exacerbated altcoin underperformance, with XRP's market dominance hitting a 90-day low as analysis indicates. However, the divergence between Bitcoin's strength and XRP's technical setup creates an asymmetric opportunity: if the $1.90 support holds, the risk-reward profile tilts sharply in favor of a countertrend rally.

Strategic Entry Point: Balancing Risk and Reward

For investors, the key lies in timing. A bullish case hinges on XRP reclaiming $2.00 and closing above $2.60 to maintain momentum toward $3.40 according to market analysis. Conversely, a breakdown below $1.90 could expose XRP to further declines toward $1.80 or even $1.25 as data shows. The immediate focus should be on the $2.00–$2.04 resistance cluster, where a successful retest would validate the TD Sequential buy signal and align with ETF-driven demand.

Conclusion

XRP's technical and on-chain dynamics present a compelling case for a reversal amid the broader altcoin downtrend. While Bitcoin dominance and macroeconomic headwinds persist, the confluence of TD Sequential signals, Fibonacci support, extreme fear metrics, and institutional accumulation creates a high-probability setup. For contrarian investors, this is not a speculative bet but a calculated position in an asset showing signs of structural resilience.