XRP at $1.74: A Strategic Buy Zone Amid Diverging On-Chain Signals

The XRP price action at $1.74 has emerged as a focal point for traders and investors, caught between conflicting narratives of on-chain accumulation and short-term selling pressure. While macroeconomic headwinds and whale-driven outflows cast shadows over near-term stability, technical indicators and institutional demand suggest a potential reversal. This analysis dissects the confluence of Fibonacci support, ETF inflows, and structural price action to evaluate whether $1.74 represents a strategic entry point.

On-Chain Divergence: Accumulation vs. Distribution

XRP's on-chain metrics reveal a market in transition. Exchange-held supply has plummeted to a seven-year low of 1.6 billion tokens, a 50% decline from October 2025 levels, signaling a shift toward self-custody. This reduction in liquidity can amplify price volatility, as fewer tokens are available for immediate selling. Simultaneously, long-term holders have added 9.03 million and 15.90 million XRP in late December, reflecting late-cycle buying behavior as prices dip.

However, this optimism is tempered by bearish signals. Whale activity-wallets holding 100 million to 1 billion XRP-has seen a 100 million token sell-off, underscoring distribution by large players. Additionally, daily active addresses on the XRP Ledger have fallen to 38,500 from 46,000, hinting at waning organic demand. These conflicting dynamics create a tug-of-war between retail/institutional accumulation and institutional profit-taking.

Technical Confluence at $1.74: A High-Probability Reversal Zone

XRP's current consolidation near $1.74 aligns with a critical Fibonacci retracement level (0.618) and the value area low, forming a zone of confluence that has historically acted as a floor for bullish reversals. Structural price action reinforces this thesis: a symmetrical triangle and falling wedge pattern suggest impending volatility. Analysts note that the triangle's breakout potential could drive a 16% move, while the wedge's breakdown has already triggered a bearish shift, pushing prices toward $1.60.

The RSI divergence further complicates the picture. While the broader trend remains bearish, buyers have been absorbing selling pressure at $1.74, forming a base that resists impulsive breakdowns. A successful defense of this level could reignite a bullish wave, targeting $2.40 and beyond, with Fibonacci extensions projecting $2.69, $3.07, and even $3.86 as potential milestones according to analysis.

Institutional Demand and Sentiment: The Hidden Catalyst

Despite bearish on-chain activity, U.S. spot XRP ETFs have injected $1.1 billion in net inflows, indicating strong institutional confidence. This accumulation, however, has not yet translated into a proportional price surge, creating a dislocation that could be exploited by strategic buyers. Social sentiment data also reveals extreme fear levels-a historical precursor to short-term rebounds according to Coindesk. The interplay between institutional buying and retail fear may soon tip the scales, particularly if XRP regains control of its point of control (POC) above $1.95.

Strategic Implications for Investors

The $1.74 level represents a high-probability inflection point. For bulls, a successful hold here would validate the Fibonacci support and wedge patterns, unlocking upside potential. For bears, a breakdown below $1.95 would confirm deeper testing of support zones, potentially dragging prices toward $0.80. Investors must weigh the risks of short-term volatility against the long-term implications of ETF-driven accumulation and reduced exchange supply.

In conclusion, XRP's current positioning at $1.74 embodies a classic battle between technical resilience and on-chain fragility. While macroeconomic and whale-driven selling pressures persist, the alignment of Fibonacci levels, institutional inflows, and structural patterns suggests a strategic buy zone for those willing to navigate near-term turbulence.