Is XRP Entering a Defining Growth Phase or Facing Liquidity Headwinds?

XRP, the digital asset at the heart of Ripple's blockchain, is at a crossroads. On-chain data suggests a potential upturn, while liquidity risks loom large. This article dissects the conflicting signals shaping XRP's trajectory in late 2025, contrasting bullish on-chain metrics with bearish liquidity concerns.

Bullish On-Chain Signals: A Foundation for Growth

XRP's on-chain metrics paint a cautiously optimistic picture. A $98.6 million whale transfer from Gemini to an unknown wallet in late 2025 signals institutional confidence in support-level accumulation, as noted in a Coinotag analysis. This aligns with a 30.7% drop in the Network Value to Transactions (NVT) ratio to 75.93, suggesting improved network efficiency and potential undervaluation, per the Coinotag analysis. Meanwhile, the Spot Taker Cumulative Volume Delta (CVD) has turned positive, reflecting buyer dominance in spot markets, according to the Coinotag analysis.

Technical indicators also hint at a rebound. XRP's Relative Strength Index (RSI) entered oversold territory below 30, a classic precursor to price recoveries, as detailed in a Coinotag report. A 66% rebound from a 10-month low near $1.58 to $2.60 has been driven by renewed buying interest, with the Spent Output Profit Ratio (SOPR) near 0.95-a historical signal of capitulation followed by rebounds-per a Coinotag analysis. Large whale selling triggered $1.5 billion in liquidations, but subsequent buying pressure restored $75 billion in market capitalization, as reported in the Coinotag analysis.

Network activity, though mixed, shows stabilization. 21,000 new wallets were created in 48 hours-the fastest growth in eight months-while the XRP Ledger's decentralized exchange recorded a record 954,000 transactions in a single day, according to a Coinotag analysis. These metrics suggest rising user interest, albeit with caveats about whale-driven volume, as noted in the Coinotag analysis.

Liquidity Risks: Fragile Order Books and Execution Challenges

Despite these bullish signals, XRP's liquidity profile remains a concern. Order-book depth, critical for reliable execution, is pair- and venue-specific. While XRP ranks among top altcoins by 1% market depth on vetted exchanges, liquidity evaporated during the October 10 deleveraging event, turning short-term holdings into extended exposures, as described in a Timestabloid commentary. This fragility underscores the path-dependent nature of execution, where timing and routing determine success, according to the Timestabloid commentary.

Exchange reserves have declined by 3.64% to $6.79 billion, with $4.75 million in outflows, as reported in a Coinotag analysis. While this suggests investors are moving XRP to private wallets, it also reduces the supply available for trading, potentially amplifying volatility. The XRP Ledger's role in tokenizing real-world assets could mitigate this risk by expanding utility beyond speculative trading, as discussed in a Coinpedia article. However, institutional adoption and regulatory clarity remain prerequisites for this transition.

Balancing the Scales: A Multi-Layered Outlook

XRP's near-term trajectory hinges on resolving this tension. If the asset breaks above $2.65 resistance, it could target $3.12, confirming a broader uptrend, as noted in the Coinotag analysis. Conversely, a breakdown below $2.20 may invite further bearish tests, per the Coinotag analysis. The interplay of whale activity, on-chain metrics, and derivatives positioning creates a multi-layered bullish case-but only if liquidity risks are managed.

For investors, the key lies in monitoring NVT and CVD trends alongside order-book health. A sustained rebound would require not just buyer dominance but also organic network adoption, evidenced by rising transaction volumes and decentralized use cases, as noted in a Coinotag analysis.

Conclusion

XRP stands at a pivotal moment. The confluence of institutional accumulation, improved on-chain efficiency, and stabilization in network activity suggests a potential growth phase. Yet, fragile liquidity and execution risks-exacerbated by high-stress events-pose a counterweight. The coming months will test whether XRP can transition from speculative asset to foundational infrastructure in a tokenized financial system, as discussed in the Coinpedia article.