XRP's Imminent Final Rally and Structural Risks Before the 'Rug Pull' Correction

The XRP market in late 2025 is at a critical juncture, where technical indicators and news-driven sentiment appear to diverge in a high-stakes tug-of-war. On one hand, bullish technical signals and institutional adoption milestones suggest a final rally is on the horizon. On the other, structural risks-including profit-taking by large holders and regulatory uncertainties-loom as potential triggers for a sharp correction. This analysis dissects the interplay between technical market structure and news-driven sentiment to assess XRP's trajectory.

Technical Market Structure: A Rally in the Making?

XRP's price action in late 2025 paints a mixed but cautiously optimistic picture. The 14-day RSI currently sits at 45.898, a neutral reading that suggests the asset is neither overbought nor oversold. Meanwhile, the MACD is showing bullish crossover potential, with the indicator hovering above its signal line-a sign of rising buying pressure. These momentum indicators align with XRP's consolidation near a critical resistance zone at $3.00, with support firmly established at $2.74.

The ascending trend channel's upper boundary has become a focal point for traders. If XRP breaks above $3.00, it could target $4–$8 by year-end 2025–2026, contingent on favorable institutional adoption. Rising trading volume and increased whale activity around key levels further reinforce a bullish bias, as large investors appear to be accumulating XRP ahead of a potential upward move. However, the moving averages remain bearish, with nine sell signals versus three buys-a cautionary note for traders.

News-Driven Sentiment: Regulatory Clarity and Institutional Adoption

The news landscape for XRP in 2025 has been transformative. The SEC's August 2025 settlement with Ripple-ending a three-year legal battle-has provided long-awaited regulatory clarity. This resolution coincided with an 11% price spike and a seven-year high above $3.40 in July 2025. The approval of Brazil's first XRP ETF in February 2025 further signaled growing institutional interest, while 11 major asset managers submitted U.S. spot XRP ETF applications, with a 95% approval probability by year-end.

Institutional adoption has also accelerated. Ripple's acquisition of Hidden Road for $1.25 billion and its rebranding as Ripple Prime-a crypto-owned global prime brokerage-has tripled on-chain activity. Partnerships with Mastercard, WebBank, and Gemini to enable on-chain settlement via RLUSD (a $1 billion market cap stablecoin) demonstrate XRP's real-world utility. These developments suggest a self-reinforcing cycle: regulatory clarity attracts institutional capital, which in turn drives price discovery.

Structural Risks: The 'Rug Pull' Looms

Despite the bullish narrative, structural risks remain underappreciated. On-chain data reveals that only 58.5% of XRP is in profit, with 41.5%-or 26.5 billion tokens-still trading at a loss. This creates a "loss selling" overhang, as holders may offload tokens to cut losses. Recent inflows into exchanges suggest large holders are preparing to distribute their positions, a red flag for retail investors.

Historical correction patterns also warrant caution. XRP is currently trading near $2.10, a level with thin historical demand. A breakdown below $2.66 could trigger a 20% downside, with critical support levels at $1.91 and $1.73 at risk. Macroeconomic factors, including Bitcoin's influence on altcoin movements and broader risk-off sentiment in crypto, exacerbate these vulnerabilities.

The Path Forward: Balancing Optimism and Caution

XRP's trajectory hinges on three key variables:
1. ETF Approvals: If U.S. spot XRP ETFs gain approval, inflows of $5B–$7B by 2026 could propel XRP toward $10+.
2. Regulatory Stability: Any new legal challenges-such as reclassification of XRP-could trigger a sell-off.
3. On-Chain Behavior: Whale activity and exchange inflows will be critical leading indicators of a potential "rug pull."

For investors, the technical setup suggests a high-probability rally if XRP breaks above $3.00. However, the structural risks-particularly loss selling and regulatory volatility-mean this rally could be short-lived. A prudent strategy would involve scaling into positions near key support levels while maintaining a tight stop-loss below $2.66.

Conclusion

XRP's 2025 story is one of duality: technical indicators and institutional adoption point to a final rally, while on-chain risks and regulatory fragility hint at a looming correction. The coming months will test whether XRP can sustain its momentum or if the "rug pull" scenario materializes. For now, the market is in a holding pattern-waiting for a catalyst to tip the scales.