XRP's Hidden Bullish Divergence and 2025 Reversal Potential

The XRP market in late 2025 presents a paradox: a bearish price trajectory coexists with emerging technical and sentiment-driven signals that hint at a potential reversal. While institutional selling and bearish indicators dominate the short-term outlook, a closer examination of on-chain activity, whale movements, and subtle bullish divergences reveals a more nuanced picture. This analysis explores how XRP's price action and market dynamics could set the stage for a reversal in a seemingly entrenched downtrend.

Technical Divergence: A Bearish Canvas with Hidden Optimism

XRP's price has been trapped in a descending channel since late 2025, with sellers maintaining control as the token struggles to reclaim key support levels like $2.16. The Relative Strength Index (RSI) has shown a classic bullish divergence, however: while the price continues to make lower lows, the RSI has formed higher lows, signaling weakening bearish momentum. This pattern mirrors a similar setup observed at the bottom of the 2022 bear market, which preceded a significant rally.

Despite this divergence, broader technical indicators remain bearish. The Supertrend and Bull Bear Power (BBP) have flipped to bearish territory, and volume spikes-particularly the 4.6× surge to 309.2M-confirm institutional exit flows. A breakdown below $2.05 could expose support at $1.80–$1.87, but a high-volume reclaim of $2.12–$2.16 might signal accumulation resuming. Traders are advised to monitor these levels closely, as a breakout above $2.60 could trigger a move toward $4, aligning with historical patterns.

On-chain data further complicates the narrative. The XRP Ledger Velocity hit a yearly high of 0.0324 on December 2, indicating heightened transactional activity and real-world usage. This surge aligns with Ripple's strategic expansion into treasury management and stablecoin payments, positioning XRP as a settlement utility rather than a speculative asset. Meanwhile, elevated velocity suggests liquidity is building beneath the surface, even as the price consolidates within the $2.20–$2.30 range.

Whale Movements: A Tale of Short-Term Volatility

Large holder activity in Q4 2025 has been unusually active, with 716 transactions exceeding $1 million each-the highest in four months. Over 150 million XRP were redistributed in a 48-hour period, signaling strategic repositioning by whales. While this volatility has not yet translated into price action, it highlights the fragility of XRP's cost basis, as older holders distribute into a market dominated by recent buyers according to CryptoSlate.

The Path Forward: Bearish Continuation or Bullish Reversal?

XRP's immediate future hinges on its ability to either break out of the descending channel or confirm a bearish breakdown. A sustained move above $2.65 could reignite bullish momentum, while a breakdown below $2.05 would likely accelerate the downtrend toward $1.80. The key lies in volume and on-chain behavior: if ETF-driven accumulation persists alongside rising ledger velocity, a reversal could materialize even in the face of short-term bearishness.

For now, the market remains in a delicate balance. Retail fear and technical bearishness dominate, but institutional inflows, on-chain activity, and subtle bullish divergences suggest the bearish narrative may not be as unidirectional as it appears. Investors should closely monitor whale activity, ETF flows, and the RSI's ability to hold above critical support levels.