XRP's Critical Price Levels and On-Chain Signals: A Pre-Reversal Setup?

XRP, the native asset of the XRP Ledger, has entered a pivotal phase in its price action and on-chain dynamics as of late 2025. With the asset trading near key support/resistance zones and exhibiting mixed on-chain signals, investors are scrutinizing whether a reversal setup is emerging for short-to-medium-term positioning. This analysis synthesizes technical and on-chain data to evaluate XRP's trajectory.

Critical Price Levels: A Bearish Breakdown or Bullish Rebound?

XRP's price action has been defined by a critical support cluster between $2.07 and $2.11. A breakdown below $2.07 has already triggered bearish momentum, with analysts warning of a potential retest of the $2.05 level. This breakdown confirms a continuation of the bearish trend, with further downside risk toward $1.90–$1.97 if the support fails to hold. Conversely, a strong rebound from $2.05-coupled with a reclamation of the $2.11 level-could signal a shift back to bullish momentum.

Technical indicators add nuance to this setup. The RSI currently stands at 43.6, indicating neutral market conditions, while the MACD line remains above the signal line, suggesting residual bullish momentum. However, the death cross formed by the 50-day ($2.3) and 200-day ($2.6) moving averages underscores a structurally bearish short-term trend. Notably, XRP has broken out of a bearish channel and retested it as support, crossing above key EMAs-a potential sign of near-term stabilization.

On-Chain Signals: Accumulation Amid Volatility

On-chain data reveals a tightening supply environment and growing institutional engagement. Exchange reserves have declined sharply, indicating reduced sell pressure and possible accumulation in private or custody wallets. This trend aligns with reduced whale activity, as large transfers to exchanges have diminished, suggesting long-term holders are retaining XRP.

The Network Value to Transaction (NVT) ratio for XRP has dropped to 108.56 in Q4 2025, a historically bullish signal. This implies that transaction volume is outpacing price appreciation, reflecting undervaluation relative to network utility. Additionally, on-chain velocity hit a yearly high of 0.0324 in December 2025, signaling heightened liquidity and economic activity.

Wallet distribution metrics further support a bullish narrative. Over 2,700 wallets now hold at least 1 million XRP (equivalent to $2.25 million or more), indicating growing confidence among large holders. Meanwhile, institutional adoption-facilitated by improved custody solutions and ETF structures-has deepened liquidity pockets, mitigating retail-driven volatility.

Technical Divergence and Institutional Catalysts

While the short-term technical outlook remains mixed, key divergences hint at potential turning points. The RSI on the 4-hour chart is nearing overbought levels, suggesting short-term exhaustion and a possible pullback to $2.20 as a favorable long entry. Meanwhile, the MACD's minimal upward movement and sub-zero readings reflect limited bullish conviction, though positive divergence in November 2025 briefly signaled stronger momentum.

Institutional flows and regulatory clarity are expected to play a decisive role in 2025. Strong inflows into XRP ETFs and clearer custody frameworks have laid the groundwork for long-term accumulation. Analysts project a range of outcomes for 2025, from a bearish $1.80–$2.50 range to a base case of $3.00–$5.00 and a bullish case of $6.00–$8.00, contingent on macroeconomic conditions and adoption trends.

Conclusion: A Pre-Reversal Setup?

XRP's current positioning straddles a fragile balance between bearish breakdowns and potential bullish reversals. The breakdown below $2.07 and the death cross signal short-term bearishness, but declining exchange reserves, elevated on-chain velocity, and institutional adoption suggest a tightening supply environment. A retest of $2.05 could either confirm further weakness or act as a catalyst for a rebound, particularly if institutional flows accelerate.

For short-to-medium-term positioning, traders may monitor the $2.05–$2.11 range as a critical battleground. A sustained move above $2.11 could reignite bullish momentum, while a failure to hold $2.05 may extend the downtrend toward $1.90. Investors should also watch for confirmation from technical indicators-such as RSI divergence or a MACD crossover above zero-as potential reversal signals.

In the broader context, XRP's real-world utility in cross-border transactions and its institutional adoption trajectory remain key long-term catalysts. For now, the asset's fate hinges on whether the current on-chain accumulation and technical divergence can coalesce into a sustained reversal.