Is XRP Entering a Critical Correction Phase? Assessing the Risk of a $1.65 Slide and the Implications for Investors

The XRP price narrative in late 2025 has become a study in duality. On one hand, institutional adoption and regulatory clarity have driven ETF inflows exceeding $1.37 billion since late 2024, creating a supply-tightening effect as exchange-held balances hit 2018 lows. On the other, technical indicators and Fibonacci retracement levels suggest a precarious balance between consolidation and collapse. With XRP trading near $1.86 as of December 2025, the question looms: Is this the prelude to a critical correction phase, and does the $1.65 level represent a make-or-break inflection point for investors?

Technical Breakdown: A Bearish Cross and Fractured Momentum

XRP's price trajectory in late 2025 reflects a textbook bearish divergence. The token has fallen nearly 40% from its July 2025 peak of $3.65, consolidating around $2 in early 2026 after a sharp post-SEC rally in 2024–2025. This correction has been exacerbated by a death cross formation, where the 50-day exponential moving average (EMA) crossed below the 200-day EMA- a bearish signal historically associated with extended downtrends.

Technically, XRP has broken above a falling wedge pattern, projecting a potential move toward $2.60–$2.70. However, immediate resistance at the 200-day EMA near $2.35 remains a critical hurdle. A Wyckoff reaccumulation pattern is also forming, with price testing $2.10–$2.15 as a potential catalyst for a markup phase. Yet, the broader bearish context cannot be ignored: XRP remains below both its 50-day and 200-day moving averages, signaling sustained bearish momentum.

Fibonacci Analysis: The $1.65 Threshold as a Final Bastion

Fibonacci retracement levels have emerged as a focal point for XRP's near-term trajectory. The 61.8% retracement level, currently near $1.63–$1.65, is now considered the final critical support zone in this correction phase. Price action has consolidated around $1.88–$1.90, a region where the 78.6% retracement sits at $1.83. A decisive break below $1.83 would shift focus to the deeper $1.65 level, where a potential reversal or continuation could unfold.

The psychological significance of the $2.00 level has also shifted: once a strong support, it has now become a broken floor. This transition underscores the fragility of XRP's current structure. If sellers maintain control and XRP slides past $1.65, the next key target would be $1.25, with a potential Q2 2026 reversal scenario contingent on macroeconomic conditions.

Implications for Investors: A High-Stakes Scenario

For investors, the $1.65 level represents a binary outcome. A successful defense of this level could trigger a short-term reversal, with buyers reclaiming value and retesting the $2.00–$2.35 range. Conversely, a breakdown below $1.65 would validate a deeper correction, potentially extending to $1.25 and erasing much of the post-SEC rally gains.

The broader implications are equally significant. A sustained move below $1.65 could undermine confidence in XRP's utility and institutional adoption, particularly if ETF inflows stall or reverse. However, a rebound from $1.65-coupled with a breakout above $2.35-could reignite bullish momentum, with targets of $2.80–$3.20 and even $8 by year-end 2026, as projected by Standard Chartered.

Conclusion: A Tipping Point in XRP's Trajectory

XRP's December 2025 price action encapsulates a pivotal moment in its market journey. The interplay of technical breakdowns, Fibonacci retracements, and institutional dynamics creates a high-stakes environment for investors. While ETF inflows and Ripple's expanding banking footprint offer potential catalysts for a rebound, the risk of a $1.65 slide remains a critical wildcard. For now, the market is watching closely: Will XRP's bulls defend the final support level, or will bears cement a new bearish chapter? The answer may well define the token's trajectory into 2026.