XRP Navigates a Critical Price Threshold Amid Divergent Investor Sentiment

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The cryptocurrency market has entered a holiday lull, placing notable pressure on XRP. Despite a landmark year marked by the resolution of its legal battle with the U.S. Securities and Exchange Commission and the launch of spot exchange-traded funds, the digital asset is struggling to sustain momentum above the psychologically significant $2 level. As of the latest data, XRP is trading near $1.86, consolidating within a narrow band.

A clear divergence is emerging between different classes of investors. On one hand, data reveals a steep decline in network activity. The number of daily active addresses on the XRP Ledger has plummeted from over 13,000 in November to approximately 3,500 currently. This dramatic drop in usage points to a significant pullback by retail participants during the seasonal period.

Conversely, institutional flows tell a different story. Since the approval of spot XRP ETFs in November, these products have recorded an impressive 25-day streak of net inflows. In the past week alone, over $80 million moved into XRP investment vehicles offered by firms such as Franklin Templeton. This pattern suggests professional investors are viewing the sub-$2 weakness as a buying opportunity, effectively absorbing selling pressure that may be partly attributed to year-end tax-loss harvesting.

Technical Analysis Points to a Precarious Balance

From a chart perspective, XRP is caught in a tight trading range between $1.85 and $1.91. The $1.85 level is currently serving as critical support; a decisive break below this floor could trigger further declines toward $1.60. To the upside, a dense resistance zone has formed between $1.90 and $1.95. The overall market sentiment, as measured by the Fear & Greed Index, sits at 24, indicating "extreme fear." This follows a nearly 50% correction from the local high of $3.67 reached in July 2025, a peak driven by anticipation of the SEC settlement.

Ecosystem Evolution with RLUSD and Ripple Payments

Shifts within the XRP ecosystem itself may also be influencing activity. Ripple’s stablecoin, RLUSD, launched in late 2024, is assuming a growing role. While XRP continues to function as a bridge currency for liquidity, RLUSD is increasingly being utilized for final settlement. This development could partially explain the reduced on-ledger transaction volume for XRP.

Simultaneously, Ripple Payments continues its expansion, leveraging the clearer regulatory environment to onboard traditional financial institutions. However, this business growth has not yet translated into immediate, direct buying pressure for the XRP token.

The Path Forward Hinges on a Key Break

For XRP to reverse its current downtrend, a conclusive breakout above the $1.95 resistance area is essential. Until that occurs, the market remains in a state of cautious consolidation, trapped between waning retail demand and steady institutional accumulation. The central question for traders is which force will ultimately prevail in determining the next major price move.