XRP's Technical Weakness: A Cautionary Outlook for Near-Term Bulls

The XRP price action in October 2025 has painted a complex picture for investors. While the asset has shown signs of accumulation and institutional interest, technical indicators and on-chain data reveal critical weaknesses that warrant a cautious approach. This analysis delves into the short-term momentum divergence, key support/resistance dynamics, and whale activity shaping XRP's near-term trajectory.

Momentum Divergence: A Warning Signal

Despite XRP's recent rebound from the $2.35 support zone and consolidation around $2.66, the Relative Strength Index (RSI) remains neutral at 53, indicating a balanced market without overbought conditions, according to a Coinotag analysis. However, a closer look at the MACD histogram on the weekly chart reveals a concerning pattern: while the indicator shows higher lows, suggesting potential momentum, short-term price action has broken below the $2.60 support level, creating a bearish structure of lower highs and lower lows, as noted in a CryptoPotato report. This divergence between the MACD and price movement signals a lack of conviction in the upward trend.

Further evidence of market uncertainty emerges from the volume profile. Over the past week, trading volume surged by 4.91% as XRP fell nearly 5% to $2.40, a classic sign of profit-taking or risk-off behavior, as reported by CoinMarketCap. This volume-price dislocation-a hallmark of momentum divergence-suggests that buyers are hesitant to step in during dips, increasing the likelihood of a prolonged consolidation phase or a breakdown below critical support levels.

Support/Resistance Dynamics: A Fragile Foundation

XRP's immediate resistance levels at $2.77 and $2.90 have historically acted as barriers to upward movement, per the Coinotag analysis. A sustained hold above $2.80 could indeed trigger a rally toward the $3 psychological barrier, but the path to this target is fraught with risks. The 200-day exponential moving average (EMA), a key technical milestone, has been confirmed as a breakout level, according to a U.Today article. However, a retest of this area below $2.55 could invalidate the bullish case, with a potential retest of the $2.40 support zone looming as a critical risk, as discussed in the U.Today article.

The $2.45 level, currently holding as a floor, is pivotal. A breakdown below this threshold would not only negate the recent bullish momentum but also reignite bearish sentiment, potentially dragging XRP into a deeper correction. Analysts caution that even a short-term pullback to $2.55 could test the resilience of retail and institutional buyers, a point also raised in the Coinotag analysis.

Whale Activity: A Bearish Overhang

On-chain data from platforms like Glassnode reveals a 15% increase in trading volume over the past week, with large transactions rising by 12%-a sign of institutional positioning, as noted by the Coinotag analysis. However, this optimism is tempered by whale activity. Since October 16, large holders have sold approximately 1.09 billion XRP tokens, representing a $2.63 billion outflow, a trend highlighted by CryptoPotato. This selling pressure has contributed to the recent price decline and underscores the fragility of the current rally.

Conclusion: Balancing Optimism and Caution

While XRP's technical setup offers a compelling case for a $3 breakout, the near-term outlook is clouded by momentum divergence and whale-driven selling. Bulls must recognize that a sustained move above $2.90 is contingent on overcoming historical resistance and maintaining support above $2.55. For now, the market appears in a state of equilibrium, with both accumulation and distribution forces at play. Investors should monitor the $2.45 level closely and brace for volatility as the asset navigates this critical juncture.