As the new year is on the horizon, the global cryptocurrency market is under extreme pressure to close 2025 on a positive note. Leading digital assets, including Bitcoin (BTC), Ethereum (ETH), and XRP, are on par for a bearish close within a consolidated environment.
XRP’s price action has been underwater in recent weeks, despite spot XRP exchange-traded funds (ETFs) continuing to post inflows and regulatory hopes. Typically, such inflows are viewed as supportive for the price, but XRP’s on-chain and derivatives data point to a different short-term possibility.
XRP Must Defend $1.77 To Sustain Bullish Momentum
The fifth-largest cryptocurrency by market capitalization is currently trading at $1.86 – down 0.8% in the past 24 hours. This drawdown reflects a mix of technical breakdowns for the price, bearish market sentiment, and broader market caution.
XRP has been in a steep descending trend ever since it lost the range-bound consolidation between $2.70 and $3.30 in November. Moreover, on-chain data has also turned bearish, posing a serious threat to a potential price rally in early 2026. XRP is currently testing the 78.6% Fibonacci retracement level at $1.87 and the 200-day SMA at $2.57. Its RSI reading of 38.82 signals weakening momentum, but yet to hit “oversold” levels.
Failure to hold $1.77 could trigger algorithmic sell-offs, while reclaiming the $1.90 zone remains critical for a bullish reversal.
XRP bulls have failed at reviving bullish momentum, as the price has been in a steep descending trend since the start of Q4 2025. While this trend seems to have reversed over the past week, it does not suggest that bulls are in control of the market. At the current pace, XRP is heading towards its crucial support at $1.78, which it has to defend to sustain the bullish sentiment.
Declining On-Chain Activity and Whale Selling Nullify Positive ETF Inflows for XRP
An early warning sign for XRP came from activity on its native blockchain, the XRP Ledger. Daily active addresses on the network have dropped to around 19,000, highlighting a drastic slowdown in user participation. Historically, price advances have aligned with expanding network activity. However, the current contraction suggests weakening organic demand for XRP, making it harder for the price to absorb the fresh supply that’s entering the open market.
Crypto analyst Ali Martinex noted a 16% drop in active addresses. Meanwhile, $40 million worth of XRP tokens were sold by large holders. This selling pressure coincided with ETF custody locks of 350 million XRP ($650.85 million), which has reduced the circulating supply.
Short-term panic from investors, led by whale exits, is clashing with long-term institutional accumulation. U.S.-listed spot XRP ETF inflows have reached $1.15 billion, signalling structural demand for the asset, but thinning liquidity has amplified volatility.
Derivatives flow data also reinforces this view. The taker buy/sell ratio for XRP across crypto exchanges has stayed consistently below 1, indicating that sell-side market orders are dominating. This means that when XRP rallies, traders are taking profits rather than chasing higher prices, explaining why the asset has struggled to sustain upside momentum despite positive ETF performances.
XRP Lacks Catalysts to Break From ‘Bitcoin Season’ as Traders Take Profits
Open interest across XRP derivatives markets has dropped sharply, from highs above $3 billion to less than a billion. This decline reflects that traders are increasingly reducing their exposure and not positioning themselves for a potential breakout. Historically, when a cryptocurrency’s open interest drops alongside price, it signals a de-risking rather than healthy consolidation.
XRP also lacks the catalysts to decouple from the “Bitcoin Season” trend, with traders favoring safer large-cap assets such as BTC and ETH amid a wider fear sentiment. Bitcoin’s 59% market dominance and the Altcoin Season Index reading of 19/100 indicate that capital is rotating away from altcoins. XRP’s 24-hour trading volume has fallen 1% to $1.8 billion compared to a 72% surge for BTC.
