Is XRP Poised for a Rebound or Further Decline Amid Key Support Tests?

The XRP price action in December 2025 has painted a complex picture of market dynamics, blending bearish technical signals with subtle hints of accumulation and institutional interest. As the token tests critical support levels and navigates shifting sentiment, investors must weigh short-term vulnerabilities against longer-term structural factors.

Technical Analysis: A Bearish Structure with Fragile Stabilization

XRP's breakdown below the $1.93 support zone in late December 2025 marked a pivotal shift in momentum, with elevated trading volume confirming active selling pressure from larger participants. The subsequent slide to $1.85 reinforced a descending channel pattern, where failed bounce attempts near $1.85 highlighted persistent bearish control. While price briefly stabilized near $1.846–$1.848, rebounds stalled at $1.85, underscoring its role as resistance rather than support.

Key levels to monitor include $1.89 (immediate support), $1.93 (critical reclamation threshold), and $1.85 (deeper stabilization zone). Momentum indicators, however, remain mixed: early bullish divergences suggest potential stabilization, but price has yet to confirm these signals with a sustained move above $1.93. If $1.85 fails, further downside toward $1.84 and the $1.77–$1.80 demand zone could open, exposing deeper liquidity challenges.

On-Chain Insights: Retail Frenzy vs. Whale Accumulation

On-chain metrics reveal a dichotomy between retail enthusiasm and whale behavior. A 490% spike in XRP address activity and a near-doubling of Realized Cap in December 2025 indicate strong retail interest, though profitability in this activity has rapidly faded, signaling fragile momentum. Meanwhile, large holders reduced their numbers by 20.6% over eight weeks, yet remaining whales increased combined holdings to a seven-year high of 48 billion XRP.

Notably, XRP whales moved approximately 800 million tokens off exchanges into cold storage and regulated institutional custody in December 2025, reducing exchange balances by 45% in 60 days. This shift, particularly through ETF custody providers, suggests accumulation rather than distribution, as tokens moved away from liquid markets into long-term storage. Such activity could indicate growing confidence among institutional players, even as retail selling persists.

Institutional Sentiment: ETFs and Strategic Positioning

The launch of the first global XRP ETF in Brazil in February 2025 marked a turning point for institutional adoption, with XRP ETFs absorbing $483 million in December 2025 alone. Ripple's partnerships with traditional financial institutions and explorations into CBDCs further underscore its potential as a cross-border payment solution. However, skepticism remains regarding XRP's decentralization and its ability to compete with stablecoins and CBDCs.

Institutional inflows appear to be driven by strategic positioning rather than speculative fervor. The reduction of exchange-held XRP by 45% in 60 days, coupled with increased custody activity, aligns with a narrative of long-term accumulation. This contrasts with the bearish technical structure, creating a tug-of-war between short-term distribution and institutional buy-and-hold strategies.

Conclusion: A Delicate Balance of Risks and Opportunities

XRP's near-term trajectory hinges on its ability to reclaim key resistance levels like $1.93 and $1.87. A sustained break above these thresholds could reignite bullish momentum, while a failure to hold $1.85 may accelerate a test of the $1.77–$1.80 zone. On-chain data, however, suggests a nuanced reality: while retail selling persists, whale activity and institutional ETF inflows point to a potential base-building phase.

Investors should remain cautious, as technical indicators and volume patterns still favor a bearish bias in the short term. Yet, the accumulation observed in custody accounts and the structural shifts in institutional sentiment could lay the groundwork for a longer-term rebound-if XRP's ecosystem can navigate regulatory and competitive headwinds. For now, the token remains in a critical consolidation phase, with its fate hinging on the interplay of flow, positioning, and macroeconomic catalysts.