XRP Approaches Critical Juncture Amid Diverging Market Signals

The XRP token finds itself at a potential inflection point as December unfolds. A stark divergence is emerging: substantial capital is flowing into institutional products like ETFs, yet the price action lacks the momentum to conquer key overhead barriers. The current precise price level is less significant than the underlying shifts in supply, demand, and overall market sentiment driving this consolidation.

A notable trend is the opposing behavior between large and small investors. On-chain data indicates that addresses classified as "whales" accumulated approximately 340 million XRP between September and November. Their collective holdings now exceed 7.8 billion tokens. Interestingly, while the number of wallets holding at least 100 million XRP has fallen by over 20%, the remaining mega-wallets collectively control their largest share in seven years, signaling increased concentration among a few powerful holders.

This institutional interest is mirrored in regulated financial products. XRP-focused exchange-traded funds (ETFs) attracted inflows nearing $906 million in just a two-week period. Concurrently, open interest for XRP futures contracts on the CME Group exchange has climbed to record levels. This paints a clear picture: professional capital is building positions even as the spot price struggles.

Conversely, many retail investors appear to have exited following the decline from the summer peak around $3.67.

Exchange Supply Dwindles as Network Activity Surges

Blockchain metrics reveal a tightening supply landscape. The quantity of XRP held on centralized cryptocurrency exchanges has plummeted in recent weeks. Cited data shows reserves dropped from roughly 3.8 billion tokens at the start of 2025 to about 1.6 billion by December—a reduction of approximately 45%.

This withdrawal, typically to private cold storage wallets, means a significant portion of the supply is effectively locked away and not immediately available for sale. Meanwhile, the network velocity, which measures how frequently tokens change hands, hit an annual high in early December. This combination of declining readily available supply and high coin circulation is often viewed by analysts as a precursor to heightened volatility, as even modest demand shocks can exert a magnified impact on price.

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

Technical Structure Hints at Impending Volatility

From a chart perspective, XRP is wrestling with persistent resistance. The token is currently trading at $2.07, which is about 32% below its 52-week high of $3.04 and only modestly above its yearly low. It has decisively broken below the 50-day moving average, situated at $2.27, and its Relative Strength Index (RSI) reading of 28.8 points to an oversold market condition.

Repeatedly, rallies have been rejected in the $2.10 to $2.20 zone. While buyers have defended support areas around the $2.00 level, selling pressure consistently resurfaces just above it. The recent high yet unsuccessful trading activity suggests distribution rather than aggressive accumulation.

The price action has formed what technical analysts identify as a symmetrical triangle pattern—a consolidation structure that typically resolves with a decisive breakout. Based on the pattern's dimensions, the cited setup implies a potential price swing of around 16%. A convincing breakout above resistance could technically open a path toward the $2.40 to $2.45 range. Conversely, a breakdown below support would suggest a correction toward $1.80 to $1.85.

Macro Pressures and the Path Forward

The broader macroeconomic environment adds another layer of caution. Many investors are adopting a wait-and-see approach ahead of the U.S. Federal Reserve's interest rate decision on December 10th. XRP has notably lagged behind recent upward moves in Bitcoin and Ethereum, failing to capitalize on the broader market's momentum.

For the coming weeks, the key will be whether XRP can muster the volume needed to sustainably break above the resistance zone just over $2.10. Simultaneously, the supports around $2.00 must hold to keep bullish prospects alive. Fundamentally, the sharp decline in exchange reserves, robust network activity, and sustained ETF inflows suggest limited downside risk—provided these trends continue and do not abruptly reverse. The window for a decisive directional move is narrowing.