The XRP token finds itself at a technical crossroads, testing a key support level after a failed breakout attempt pushed it to a fresh annual low. This price weakness presents a stark contrast to robust institutional inflows and significant regulatory advancements, creating a complex landscape for the digital asset.
Institutional Demand Defies Price Action
Despite the downward pressure on its market value, XRP continues to attract substantial institutional capital. Spot exchange-traded funds (ETFs) holding XRP have recorded net inflows for 21 consecutive trading days. Since their launch, these products have collectively gathered approximately $1 billion in net new assets.
Leading this charge are two specific funds:
* The Canary XRP ETF (XRPC), with net inflows of about $376.5 million.
* The Franklin XRP ETF (XRPZ), which has attracted roughly $193 million.
This sustained appetite stands in direct opposition to the outflows seen in U.S. Bitcoin spot ETFs on the same day, suggesting a structural preference for XRP among certain institutional investors. Furthermore, professional investors gained expanded access with the launch of regulated XRP trading against the Hong Kong dollar, broadening the asset’s institutional footprint in the Asia-Pacific region.
Chart Structure Tilts Bearish
From a technical perspective, the short-term outlook has deteriorated. The price broke below a previously crucial Fibonacci support level that had acted as a pivot during past consolidation phases, shifting momentum in favor of sellers.
Currently trading at $1.92, XRP hovers just above its 52-week low of $1.90. This represents a discount of over 13% compared to its 50-day moving average of $2.20. The 14-day Relative Strength Index (RSI) reading of 28.8 indicates an oversold condition, suggesting selling pressure may be exhausting itself and setting the stage for a potential corrective bounce.
Key technical levels to watch are:
* Immediate Resistance: The former support zone between $1.93 and $1.95.
* Critical Support: The $1.88 to $1.90 range.
* Lower Supports: The November low near $1.82, followed by a deeper support level at $1.75.
The advantage remains with sellers until the $1.93 area is reclaimed on notably higher volume. A decisive break below $1.88 would likely confirm the bearish trend and open a path toward the November lows.
On-Chain Activity and Derivatives Paint a Cautious Picture
Recent on-chain data reveals significant activity from large holders, contributing to the selling pressure. Over recent weeks, major addresses moved approximately 510 million XRP tokens in total. Adding to the downward momentum, one experienced large holder realized gains of around $721 million on December 11 by moving previously dormant holdings, a move that typically dampens short-term sentiment.
The derivatives market exhibits an extreme skew, with roughly 96% of open positions being short bets against XRP and only about 4% long. This heavy short positioning amplifies bearish pressure but also creates fertile ground for a short squeeze should any positive catalyst emerge.
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Despite these pressures, the XRP Ledger network maintains high activity, processing transactions with minimal fees of about $0.0002 and settlement times of 3–5 seconds—a core technical advantage for payment use cases.
Regulatory Milestones and Ecosystem Growth
Fundamentally, Ripple achieved a significant regulatory milestone. On December 12, the U.S. Office of the Comptroller of the Currency (OCC) granted preliminary approval for the formation of the Ripple National Trust Bank. Based in New York, the planned institution is designed to:
* Provide crypto custody services for institutional clients.
* Manage the segregated reserves for the RLUSD stablecoin.
* Offer trust and collateral management services for RLUSD holders.
This approval marks a major step toward deeper integration with traditional finance and could bolster XRP’s long-term role within Ripple’s ecosystem.
Concurrently, the RLUSD stablecoin itself is expanding, with its market capitalization now exceeding $500 million. Its integration with Wormhole’s Native Token Transfers enables use across multiple blockchains. This multichain functionality enhances the utility of both RLUSD and XRP by simplifying the movement of assets between different networks.
Short-Term Pressure vs. Medium-Term Foundation
The overall picture is bifurcated, weighing immediate headwinds against longer-term supportive developments.
Short-Term Headwinds:
* The breach of major technical support levels.
* A clearly bearish market structure dominated by short positions.
* Pronounced profit-taking and redistribution by large wallet addresses.
* The upcoming Bank of Japan interest rate decision as an additional macro factor.
Medium-Term Tailwinds:
* Persistent, strong ETF inflows totaling $1 billion since inception.
* Regulatory progress via OCC approval for the Ripple bank.
* A growing RLUSD ecosystem with multichain capabilities.
* Market anticipation of a potential U.S. Federal Reserve rate cut in March.
The macro focus this week shifts to the Bank of Japan. A widely expected 25-basis-point hike to 0.75% could narrow the interest rate differential with the U.S., potentially pressuring Yen carry trades—a scenario historically associated with weakness in risk assets, including cryptocurrencies.
The immediate trajectory now hinges on the defense of the $1.88 to $1.90 support zone. A stabilization pattern above this range could lay the groundwork for a technical rebound, while a sustained breakdown may open the door for a test of the November lows around $1.82 and below.
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