XRP is showing renewed strength as traders analyze whether a push into the $2.30–$2.50 zone is possible. The token held its key psychological support at $2 this week and rebounded nearly 6% on Tuesday after Monday’s liquidity sweep. Although XRP remains in a broader downtrend dating back to July, the $2.28–$2.30 resistance area has become the critical level that could define whether bullish momentum can return.
Key points:
- A daily close above $2.30 could confirm a structural breakout and open the door to a move toward $2.58.
- XRP has been moving sharply between liquidity pockets throughout 2025, increasing the probability of a strong rally once momentum shifts.
- Negative funding rates and declining open interest indicate bearish sentiment, but reclaiming the $2.22–$2.30 range could trigger a squeeze and shift the trend.
XRP approaches a decisive price zone
XRP’s bounce to $2.17 came after retesting the fair value gap below $2, created during the Nov. 21 rally from $1.80. This reaction suggests buyers are still active at discounted levels, even within a downtrending structure.
Despite continuing to form lower highs, the price compression under $2.30 resembles a tightening coil forming under a major decision point. A confirmed daily close above $2.30 would mark the first structural trend reversal since July and could open a clean path toward the next liquidity cluster at $2.58. The $2.34–$2.42 zone may act as early profit-taking territory due to its sell-side fair value gap.
XRP has spent 2025 jumping aggressively from one liquidity area to another, often overshooting intermediate resistance once momentum builds. This behavior supports the possibility of an extended move toward $2.58 if buyers regain control.
Technical indicators show mild bullish signs. The RSI leans upward, and reclaiming the 200-period simple moving average would strengthen the bullish case. Futures open interest dropping from $8.6 billion to $3.8 billion in Q4 also suggests that the next major move could be sharp due to reduced positioning.
Funding rates divide sentiment as traders look for direction
Analyst Pelin Ay noted that XRP funding rates remain mostly negative, showing that short positions still dominate futures markets. With price and funding falling together, the downtrend remains intact, increasing the probability of testing the $2.00–$1.90 region unless structure changes. Ay added that if funding drops below –0.01, the chance of a move toward $1.90 becomes more likely.
However, deeply negative funding often precedes liquidity hunts. In this scenario, XRP may consolidate briefly before attempting to break above $2.30.
Trader Dom highlighted early signs of a possible reversal. When charted in reverse, XRP shows a clear three-drive exhaustion formation over the past six weeks, indicating that the trend may be losing strength. A higher low has now formed, and reclaiming the monthly rVWAP at $2.22 would signal the start of a bullish rotation toward the $2.50 area.
Dom cautioned, however:
“If there was a time for this trend to reverse, it’s now. If the setup fails, acceptance below $2 is next, and the end of the year could look ugly.”
