Is XRP's Overbought Monthly RSI a Bear Market Signal or a Final Bull Run Catalyst?

The cryptocurrency market has long been a theater of extremes, where technical indicators often serve as both harbingers of caution and catalysts for euphoria. For XRP, the recent surge in its monthly Relative Strength Index (RSI) to overbought levels above 80 has reignited debates about whether this signals an impending bear market or a final bullish surge. This analysis delves into the technical structure, on-chain fundamentals, and macroeconomic trends to determine whether XRP's current trajectory aligns with a late-stage bull phase or a prelude to correction.

Technical Market Structure: Overbought RSI and Historical Precedents

XRP's monthly RSI reaching 80 in 2025 is a rare event, having occurred only once before in 2017 according to reports. Historically, such overbought conditions have preceded significant corrections. In 2017, XRP's RSI above 80 was followed by a bear market confirmed when the indicator fell below 50 according to analysis. However, in 2025, the RSI remains above 50, suggesting that the market has not yet entered bearish territory. This divergence hints at a potential "late-stage bull distribution phase," where upward momentum persists despite exhaustion at key resistance levels as data shows.

On shorter timeframes, XRP's RSI hovers near 70, approaching intraday overbought levels according to technical analysis. The $2.30–$2.40 resistance zone has shown signs of exhaustion, with price action indicating a critical inflection point. Meanwhile, the 14-day RSI for XRP/USD stands at 52.287, a neutral reading according to market data, while the RSI has gradually declined from 80 to 45 since July 2025, signaling increasing bearish momentum according to technical indicators. This trend has not yet reached oversold territory, leaving room for further consolidation or a final bullish surge before a potential reversal.

Analysts like Egrag Crypto caution that while a macro bear market cannot be ruled out, the current RSI pattern does not confirm a breakdown according to market analysis. Traders are advised to monitor the 1.95 support line and the $2.40–$2.50 resistance zone, as these levels will determine the next directional move according to price analysis.

On-Chain Fundamentals: Accumulation vs. Usage Divergence

XRP's on-chain fundamentals present a mixed picture. Institutional confidence has surged following Ripple's SEC settlement, which cleared XRP of securities classification according to regulatory analysis. This regulatory clarity has catalyzed the launch of spot XRP ETFs by firms like Bitwise and Franklin Templeton, with cumulative inflows reaching $622 million in November 2025 according to market reports. These ETFs have driven XRP's price above $2.00, a psychological milestone according to market data, and positioned the token as a key player in the ETF-driven bull market.

Large holder accumulation metrics reinforce bullish sentiment. Wallets holding over 10,000 XRP tokens have reached a record 317,500, with a 1.8% monthly increase according to on-chain data. Over 216 million XRP ($556 million) were withdrawn from exchanges in a recent week, signaling long-term accumulation according to financial reports. Cumulative volume delta (CVD) metrics also turned bullish, aligning with growing active addresses and institutional demand according to market analysis.

However, XRP's utility remains a concern. Despite RippleNet's expansion to 300 banking partners, transaction volume has plummeted by 50% in the past month according to on-chain data. Daily transactions dropped to 686,000 in late November, far below the 1.2–1.5 million average according to transaction data. Banks are increasingly using RippleNet as a traditional payment platform without requiring XRP, creating a gap between infrastructure adoption and token usage according to market analysis. ETF inflows, while boosting liquidity, have not spurred on-chain activity, as tokens are often stored in cold wallets according to financial reports.

Macro Trends: Regulatory Clarity and ETF-Driven Optimism

The macroeconomic backdrop for XRP is undeniably bullish. Ripple's legal victory with the SEC has resolved a long-standing regulatory overhang, enabling broader institutional adoption according to regulatory analysis. The RLUSD stablecoin, now valued at $1 billion, further enhances XRP's utility in cross-border payments according to market analysis. Analysts project a price range of $3.00–$5.00 for XRP in 2025, contingent on sustained ETF inflows and market optimism according to price forecasts.

Yet, challenges persist. XRP's price remains below its 50-day EMA, and retail demand remains subdued according to market data. The broader crypto market's bearish sentiment, with most major tokens experiencing outflows, contrasts with XRP's ETF-driven inflows according to market analysis. This divergence suggests that while institutional confidence is robust, retail participation and on-chain usage must catch up to sustain a prolonged bull run.

Conclusion: Late-Stage Bull Phase or Imminent Correction?

XRP's overbought monthly RSI, combined with bullish on-chain accumulation and macroeconomic tailwinds, paints a picture of a late-stage bull phase rather than an imminent crash. The historical precedent of 2017 underscores the risk of a correction if the RSI drops below 50 according to market analysis, but the current technical structure-still above 50-leaves room for a final surge. ETF inflows and institutional adoption provide a strong foundation, yet the lack of on-chain usage and declining transaction volume highlight vulnerabilities.

Investors should adopt a cautious yet opportunistic stance. Key levels to monitor include the $2.40–$2.50 resistance zone and the 1.95 support line according to price analysis. If XRP breaks above $2.50, it could target $3.00–$5.00 according to market forecasts, but a pullback to test support would be prudent for long-term accumulation. The market's next move will hinge on whether institutional demand translates into broader utility and retail participation-a test that could define XRP's trajectory in the final months of 2025.