XRP's Bullish RSI Divergence: A Precursor to a Major Reversal?

The cryptocurrency market has long been a theater of volatility, where technical indicators and institutional sentiment often collide to shape price trajectories. In the case of XRP, recent developments suggest a complex interplay between bearish short-term dynamics and bullish structural undercurrents. This analysis delves into the technical momentum and institutional activity surrounding XRP in late 2025, assessing whether the observed RSI divergence could herald a significant reversal.

Technical Momentum: Divergence and Structural Weakness

XRP's price action in late November 2025 revealed a bullish RSI divergence on the daily chart, with the asset forming lower lows while the RSI traced higher lows. This divergence, a classic sign of waning bearish momentum, has historically signaled potential rebounds in trending markets. However, the broader technical picture remained fragile. By early December, XRP had fallen to $2.05, breaching the critical $2.16 support level and entering a descending channel defined by declining highs. The breakdown was accompanied by a surge in trading volume-309.2M-indicating institutional selling pressures overwhelming ETF inflows.

While the RSI divergence hinted at a possible near-term bottoming process, momentum indicators remained in deep oversold territory without a clear confirmation of a completed corrective wave. Traders were advised to monitor hourly RSI and MACD levels for early reversal cues, with a $2.12–$2.16 reclaim seen as a potential resumption of accumulation. Conversely, a breakdown below $2.05 risked exposing the $1.80–$1.87 demand band, a level last tested in late 2024.

Institutional Sentiment: Accumulation Amid Chaos

Amid the short-term bearishness, institutional and whale activity painted a more nuanced picture. Large XRP wallets-those holding 1 billion XRP and 100 million–1 billion XRP-added 130 million XRP to their holdings in late November. This accumulation, coupled with a 45% decline in exchange supply over 60 days, suggests strategic buying by long-term holders. Such behavior often precedes market bottoms, as institutional actors capitalize on oversold conditions to build positions.

Meanwhile, XRP ETF inflows surged to $666.6M in November, reinforcing the token's institutional narrative. This inflow contrasted sharply with the immediate-term selling, highlighting a tug-of-war between short-term profit-taking and long-term bullish conviction. Ripple's regulatory progress further bolstered this narrative: the company's pursuit of a U.S. banking license added a layer of credibility to XRP's utility and adoption potential.

The Path Forward: Divergence as a Double-Edged Sword

The bullish RSI divergence, while promising, must be contextualized within XRP's broader technical framework. A successful rebound above $2.16 would validate the divergence as a reversal signal, potentially triggering a test of the $2.30–$2.40 resistance zone. However, failure to hold $2.16 would confirm the descending channel's dominance, with $1.80–$1.87 becoming the next critical support cluster.

Institutional sentiment, meanwhile, remains a wildcard. Whale accumulation and ETF inflows suggest a belief in XRP's long-term value, but the immediate-term selling pressure underscores the fragility of market psychology. For a full reversal to materialize, these two forces must align-a scenario that hinges on Ripple's regulatory milestones and macroeconomic conditions stabilizing.

Conclusion: A Calculated Bet on Resilience

XRP's technical and institutional dynamics present a mixed but not entirely bearish outlook. The RSI divergence, combined with whale accumulation and ETF inflows, hints at a potential inflection point. However, the breakdown below $2.16 and institutional selling in early December caution against premature optimism. Investors should treat the $2.05–$2.00 range as a pivotal battleground: a sustained close above $2.12 could reignite bullish momentum, while a descent below $1.87 would likely deepen the bearish narrative.

In a market where sentiment shifts rapidly, XRP's path forward will depend on whether the observed divergence marks the end of a downtrend-or merely a temporary reprieve.