Is XRP's Swing Failure Pattern at $1.80 a Legitimate Buy Signal?

The XRP price action in late 2025 has sparked intense debate among traders and analysts, particularly around the formation of a swing failure pattern (SFP) at the $1.80 level. This pattern, coupled with mixed on-chain demand signals, raises critical questions about whether the current price environment represents a genuine reversal opportunity or a deceptive consolidation phase. To evaluate this, we must dissect the technical and on-chain dynamics shaping XRP's trajectory.

Technical Reversal Confirmation: A Fragile Foundation

A swing failure pattern typically emerges when an asset tests a key support or resistance level, briefly breaches it, and then rebounds with renewed momentum. In XRP's case, the $1.80 level has acted as a psychological floor, with price dipping below this threshold in late December 2025 before recovering. This behavior aligns with classic SFP characteristics, suggesting a potential shift in momentum from bearish to bullish according to technical analysis. However, the pattern's legitimacy hinges on two critical factors:

1. Defending the POC at $1.98: The Point of Control (POC) at $1.98 remains a formidable barrier. While reclaiming this level could catalyze a move toward $2.20, sustained failure to breach it risks trapping buyers in a prolonged consolidation phase according to technical analysis. Volume behavior will be pivotal here-if bulls can drive price above $1.98 with increasing volume, it would validate the SFP as a reversal signal. Conversely, weak volume during breakouts may indicate a lack of conviction according to market data.

2. Fibonacci Resilience: The 0.618 Fibonacci retracement level (~$1.85) has become a critical support zone. Holding above this level is essential for preserving the bullish case, as a breakdown could reignite selling pressure and extend the downtrend according to technical analysis. The RSI's proximity to oversold territory (~25) further complicates the narrative, hinting at exhausted bearish momentum but not necessarily confirming a reversal according to on-chain data.

On-Chain Demand: A Tale of Contradictions

On-chain metrics paint a nuanced picture of XRP's demand dynamics. The XRP Ledger's record network velocity of 0.0324 on December 2, 2025, signals heightened activity, likely driven by whale movements and increased retail participation according to on-chain data. This surge in velocity often correlates with liquidity expansion and price discovery phases, suggesting underlying demand. However, this optimism is tempered by persistent selling pressure from large holders:

• Whale Offloading: Over 1.4 billion XRP were sold by whales in late 2025, with an additional 510 million tokens liquidated within a single week according to market reports. Such activity erodes market confidence and could delay a sustained recovery.
• ETF Inflows vs. Price Action: US-listed XRP ETFs have attracted $1.14 billion in net inflows since their launch, yet this capital has not translated into a meaningful price rebound according to on-chain data. This disconnect implies that institutional demand may be decoupling from short-term price movements, possibly due to hedging strategies or long-term accumulation.
• Exchange Reserves: Binance's XRP reserves have plummeted to 2.6 billion tokens-the lowest since July 2024-suggesting reduced exchange selling and a shift toward self-custody according to on-chain data. While this could eventually support a bullish case, the Whale Flows 30-DMA remains negative, underscoring ongoing distribution by large holders according to on-chain data.

Synthesis: A High-Risk, High-Reward Scenario

The interplay between technical and on-chain signals creates a paradox: XRP's SFP at $1.80 hints at a potential bottom, but the absence of robust on-chain demand and persistent whale selling complicates the bullish thesis. For the SFP to qualify as a legitimate buy signal, three conditions must align:
1. Price must decisively reclaim $1.98 with strong volume, confirming institutional participation.
2. Whale selling must abate, evidenced by a sustained drop in the Whale Flows 30-DMA.
3. ETF inflows must translate into price action, indicating that capital is flowing into XRP for speculative or strategic purposes rather than being parked in cash.

Until these conditions materialize, the $1.80–$1.90 demand zone remains a high-risk area for buyers. A breakdown below $1.80 could trigger a retest of the 2024 lows, while a successful defense and breakout might position XRP for a $2.20 retest. Traders should treat this as a speculative trade, with strict stop-loss levels below $1.70 to mitigate downside risk.

Conclusion

XRP's swing failure pattern at $1.80 is a compelling technical signal, but its legitimacy as a buy opportunity depends on corroborating on-chain evidence. While the XRP Ledger's velocity surge and ETF inflows suggest latent demand, the ongoing whale selling and weak price-volume dynamics cast doubt on a near-term reversal. Investors should approach this level with caution, treating it as a potential entry point only after confirming a breakout above $1.98 and a material reduction in large-holder distribution. In the absence of such confirmation, the asset remains in a transitional phase, where patience and risk management will be paramount.