XRP's Technical Inflection Point at $1.80: Is This the Setup for a Strong Reversal?

XRP, the native token of the XRP Ledger, has been trading in a critical consolidation phase around the $1.80 support level, sparking debate among traders and analysts about its potential for a short-term reversal. With the token having tested this level multiple times in 2025, the confluence of technical indicators, on-chain activity, and institutional dynamics suggests a pivotal moment for XRP. This analysis evaluates the risk-reward dynamics and reversal potential at this inflection point.

Technical Indicators: Bearish Momentum vs. Divergence Signals

XRP's price action has been characterized by bearish momentum, with the formation of a death cross in early November as the 50-day moving average fell below the 200-day moving average. The Relative Strength Index (RSI) currently sits in bearish territory at 39–41, indicating the market is not yet oversold but leaves room for further downward movement. However, signs of divergence are emerging. A swing failure pattern at $1.80-where price briefly dipped below the level before rebounding-suggests weakening bearish control. Additionally, the MACD histogram turned negative in mid-November, reinforcing the downward trend, but recent RSI divergence hints at potential exhaustion in the selling pressure.

The $1.80 level itself is reinforced by Fibonacci confluence, aligning with the 0.618 retracement level and historical support zones. A double bottom pattern on the 4-hour chart near this level has formed, with two successful rebounds reinforcing the case for a bullish reversal. For a reversal to gain traction, XRP must reclaim key resistance levels like $1.98 and $2.21, with volume confirmation being critical for a sustainable breakout.

On-Chain Activity: Accumulation Amid De-Risking

On-chain data reveals a mixed picture. While whale exposure has declined sharply-from $191 billion in July to $104 billion by late December-indicating de-risking by large holders, consistent exchange outflows suggest accumulation by major participants at key levels. This dynamic points to potential support if broader market sentiment improves.

Institutional demand via ETFs has remained robust, with cumulative net inflows exceeding $1.25 billion since mid-November. However, this has not yet translated into price stability, as spot selling and macroeconomic risk-off sentiment continue to outweigh ETF-driven buying. The XRP Ledger's utility is also evident, with over four billion transactions processed in 2025, but this has not yet driven strong price momentum.

Risk-Reward Dynamics: A High-Stakes Scenario

The $1.80 level represents a critical juncture. A successful rebound could trigger a move toward $1.98 and $2.21, with the latter aligning with the 50-day moving average and recent highs. Conversely, a breakdown below $1.80 would expose further downside targets at $1.62 and $1.25, the October 10 flash-crash low.

The risk-reward ratio for a bullish trade is asymmetric if XRP holds above $1.80. A 7% drop to $2.05 in December 2025 confirmed institutional selling pressure, but retests of this level showed buyers defending the floor without sufficient momentum for a reversal. For a bullish continuation, price must maintain above $1.80, with volume surging on a breakout above $1.98.

Conclusion: A Tipping Point for XRP

XRP's technical structure remains bearish, but the confluence of Fibonacci support, RSI divergence, and on-chain accumulation suggests the market may be nearing exhaustion. A sustained breakout above $1.98 could signal a reversal, but macroeconomic pressures and bearish momentum remain hurdles. Traders should closely monitor volume behavior and institutional activity for confirmation. If XRP can reclaim $2.10, the path to $2.80 and $3.65 becomes increasingly viable. For now, the $1.80 level is the linchpin of this high-stakes scenario.