Is XRP Poised for a Pre-Weekend Breakout as Technical and Macro Signals Align?

The XRP market in late December 2025 presents a compelling case of divergence and convergence. While retail sentiment remains bearish and the token struggles to break above $2.00, institutional demand, on-chain accumulation, and macroeconomic shifts suggest a potential inflection point. This analysis examines whether the alignment of technical, on-chain, and macro risk-on signals could catalyze a pre-weekend breakout.

On-Chain Accumulation and Institutional Demand

XRP's on-chain activity in December 2025 reveals a tug-of-war between retail pessimism and institutional optimism. U.S. spot XRP ETFs absorbed $1.1–$1.2 billion in net inflows during the final weeks of 2025, with cumulative inflows reaching $1.37 billion by January 2026. This contrasts sharply with Bitcoin and Ethereum ETFs, which faced outflows during the same period. The inflows coincided with a sharp decline in exchange reserves, particularly on Korean exchanges like Upbit and Bithumb, where XRP reserves dropped by 22 million tokens in early January 2026. Historically, such reserve contractions have preceded price rallies, as seen in prior XRP cycles.

Long-term holders (LTHs) also intensified accumulation, adding 9.03 million XRP on December 27 and 15.90 million XRP on December 29. Mid-term holders (1–3 month holding band) increased their share of the total supply from 9.58% to 12.32% between November and December 2025. However, whale cohorts (wallets holding 100 million–1 billion XRP) reduced their holdings by 100 million tokens in late December, signaling ongoing distribution. This duality-LTH accumulation versus whale selling-creates a mixed on-chain narrative, but the ETF-driven reduction in float (780 million XRP locked up) suggests tightening supply dynamics.

Technical Resistance and Liquidity Dynamics

Technically, XRP remains trapped in a descending channel defined by resistance at $1.98–$2.00, $2.05–$2.10, and $2.28, with critical support at $1.79, $1.64, and $1.48. The token has failed to break above $2.00 three times in late December 2025, with the most recent rejection at $2.01 accompanied by an 186% surge in trading volume. This defensive selling at the $2.00 level indicates strong short-term bearish bias, but buyers have consistently stepped in to defend the $1.97–$1.98 support zone.

A sustained close above $2.01 could trigger a move toward $2.15–$2.20, but a breakdown below $1.79 would expose XRP to a potential slide toward $1.27. The RSI has stabilized but remains in neutral territory, failing to enter bullish expansion. For a breakout, XRP must consolidate in the $1.82–$1.90 range and close above $1.98–$2.00 with sustained volume.

Macro Risk-On and Fed Policy Catalysts

Macroeconomic conditions in late December 2025 began to shift in favor of risk-on assets. The Federal Reserve's balance sheet expansion and use of overnight repos signaled easing liquidity conditions. The New York Fed's Treasury bill purchases and the cessation of securities holdings runoff further reinforced a dovish policy stance. Analysts like Paul Barron argue these liquidity improvements could underpin a crypto rally, with XRP benefiting from its ETF-driven demand.

XRP's on-chain utility also aligns with macro optimism: daily transactions on the XRP Ledger hit a 180-day high of 1.45 million, and exchange reserves fell to their lowest level since 2018. This tightening supply environment, combined with ETF inflows, creates a scenario where institutional demand could outpace bearish sentiment. Geoffrey Kendrick of Standard Chartered projects XRP could reach $8 by 2026 if these trends persist.

Convergence and the Pre-Weekend Outlook

The convergence of on-chain, technical, and macro signals suggests a potential breakout scenario. Institutional inflows and LTH accumulation indicate late-cycle buying during a local downtrend, while whale selling reflects profit-taking or hedging. Technically, XRP's failure to break above $2.00 has created a "key level" that could trigger a breakout if buyers overcome resistance. Macro risk-on signals, particularly Fed liquidity easing, provide a tailwind for a rally.

However, risks remain. A breakdown below $1.79 would validate the bearish case, and whale selling could persist. The pre-weekend setup hinges on whether institutional buyers and ETF demand can push XRP above $2.00 with sufficient volume to break the descending channel. If successful, the path to $2.15–$2.20-and eventually $3.00–$4.00-becomes viable.

Conclusion

XRP's December 2025 dynamics reflect a classic "buy the rumor, sell the news" pattern, with institutional demand and macro optimism clashing against retail bearishness and whale distribution. While the technical setup remains fragile, the alignment of on-chain accumulation, ETF inflows, and Fed liquidity signals creates a compelling case for a pre-weekend breakout. Investors should closely monitor volume at $2.00 and whale activity, as these will determine whether XRP transitions from consolidation to a new bullish phase.