While XRP navigates a challenging quarter marked by declining prices and retail pessimism, a significant divergence is emerging beneath the surface. Institutional players are methodically increasing their holdings, creating a fascinating counter-narrative to the prevailing technical weakness.

A Divergence Between Sentiment and Capital Flows

The technical outlook for XRP remains under clear pressure. Trading at approximately $1.86, the asset sits notably below its 50-day moving average of $2.10, reinforcing the existing downtrend. A 14-day Relative Strength Index (RSI) reading of 28.8 further confirms an oversold condition, highlighting the recent intensity of selling activity.

Key technical levels are well-established. The zone around $1.75 represents a critical short-term support level. A breach below this point would shift focus to a deeper support area near $1.50. On the upside, the $2.00 region continues to act as a major resistance barrier, a level where XRP has repeatedly faced rejection.

Contrasting this weak price action is a robust pattern of institutional investment. U.S. spot ETFs for XRP continue to attract stable capital inflows, undeterred by the corrective phase and gloomy charts.
* Net inflows into XRP spot ETFs reached about $11.93 million on the shortened trading day of December 24.
* Since their launch, these products have accumulated net inflows totaling roughly $1.14 billion.
* Leading the pack is the Canary XRP ETF (XRPC) with assets under management nearing $385 million.
* Combined, offerings from Bitwise, Grayscale, and Franklin Templeton hold over $720 million.

This persistent demand suggests institutional investors may view the current valuation as an accumulation or entry opportunity, effectively decoupling their long-term strategy from short-term market volatility.

Should investors sell immediately? Or is it worth buying XRP?

Retail Participation and Macroeconomic Crosscurrents

On-chain metrics paint a different picture for smaller market participants. The number of active XRP accounts (unique senders) has declined markedly in recent days, falling from over 17,500 to 14,636. This indicates waning activity and potentially reflects profit-taking or capitulation among retail holders.

This trend is accompanied by a deeply pessimistic market mood. The Crypto Fear & Greed Index sits at a level of 20, signaling “Extreme Fear.” The combination of weak network activity and depressed sentiment reinforces the view of an ongoing shake-out in the retail segment.

From a macroeconomic perspective, a potential stabilizing factor has emerged from Japan. Inflation in Tokyo has cooled to an annual rate of 2.0%, weakening the Yen and revitalizing interest in Yen carry trades. This practice, where investors borrow in low-yielding Yen to invest in higher-returning assets like cryptocurrencies, could funnel additional liquidity toward risk assets such as XRP. With the Bank of Japan signaling a less restrictive policy path, this dynamic may persist into early 2026.

The Bull-Bear Standoff and Key Levels to Watch

The current landscape presents a paradox: bearish technicals juxtaposed with solid fundamental underpinnings.

• Factors Weighing on Price: Trading below key moving averages, poor quarterly performance, declining retail engagement, and a dominant fear-driven sentiment.
• Supportive Factors: Strong, consistent ETF inflows, a clarified regulatory standing in the U.S., and a macroeconomic environment conducive to carry trades and increased liquidity.

In the near term, the $1.75 support level becomes the focal point for chart analysts. A successful defense of this zone, coupled with sustained ETF inflows, could pave the way for another test of the $2.00 resistance area. Conversely, a breakdown below this support would likely accelerate the cleansing of weak hands, potentially establishing a more durable foundation for a recovery later in 2026.

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