XRP Price Analysis and Key Levels
XRP successfully defended its $2 psychological floor this week, experiencing a rebound of nearly 6% on Tuesday following a brief liquidity sweep on Monday. Despite remaining in a multimonth downtrend that began in July, the $2.28–$2.30 resistance band has emerged as the critical pivot for potential bullish continuation.
Key Takeaways:
- •A bullish daily close above $2.30 would signify a break of structure, potentially leading to a move towards $2.58.
- •XRP has exhibited aggressive movement between liquidity pockets in 2025, increasing the likelihood of an outsized rally.
- •Mildly negative funding rates and weakened open interest suggest bearish conditions; however, reclaiming the $2.22–$2.30 range could trigger a squeeze-driven trend reversal.
Chart Structure and Potential Breakout
XRP's recent bounce to $2.17 occurred after touching the fair value gap (FVG) located just below $2. This area was formed during the rebound from $1.80 on November 21, indicating sustained buyer activity in discounted zones even within the broader downtrend.
Structurally, XRP has continued to print lower highs, but the price compression below $2.30 resembles a coil forming at a major decision point.
A daily close above $2.30 would represent the first trend shift since July, confirming a bullish structural break and clearing a path towards the next liquidity cluster at $2.58. The zone between $2.34 and $2.42 is identified as a sell-side FVG, where early profit-taking is anticipated.
Historically, XRP's price action in 2025 has been characterized by forceful movements between extreme liquidity pockets. This suggests that once momentum shifts, XRP often overshoots intermediate resistance in pursuit of liquidity, making $2.58 a plausible extended target.
The relative strength index (RSI) shows a modestly bullish lean, and a reclaim of the 200-period simple moving average (SMA) would offer strong confirmation. Concurrently, futures open interest has significantly decreased from $8.6 billion to $3.8 billion in Q4, implying that any directional expansion could unfold rapidly due to thinner market positioning.
Funding Dynamics and Trader Sentiment
Analyst Pelin Ay noted that XRP funding rates have remained predominantly negative, indicating a dominance of short positions in the futures market. The simultaneous decline in both price and funding reinforces a bearish sentiment, increasing the probability of a retest of the $2.00–$1.90 zone unless the market structure shifts.
Ay suggested that a further drop in funding below –0.01 would make a move towards $1.90 increasingly likely. However, deepening negative funding often precedes liquidity raids. In such a scenario, XRP could experience a brief consolidation phase before potentially driving above $2.30.
In parallel, crypto trader Dom observed signs of an emerging reversal. The trader highlighted that an inverted XRP chart revealed a clear three-drive exhaustion pattern over the past six weeks, suggesting potential trend fatigue.
A higher low has now been established, and reclaiming the monthly relative volume-weighted average price (rVWAP) at $2.22 would signal an ongoing bullish rotation, potentially paving the way towards the $2.50 region. However, the trader cautioned:
“Orderbooks are clear, if there was a time, it's now for this trend to shift. If this setup fails, acceptance under $2 is next and the end of year is ugly.”
