XRP Nears Critical Price Level Amid Market Uncertainty

The cryptocurrency market has been navigating turbulent waters following the latest Federal Reserve meeting, with XRP now trading at a crucial technical juncture. As cautious sentiment spreads, ETF inflows moderate, and on-chain metrics present conflicting signals, all eyes are on the digital asset's ability to defend the psychologically significant $2.00 zone. The coming days will determine whether macro pressures and institutional flows will overwhelm support or if a recovery can take hold.

A climate of fear currently dominates digital asset markets, reflected by a broad "Fear & Greed" Index reading of 29. XRP has mirrored this weakness, shedding approximately 8% over the past week and around 20% over the last thirty days. This decline has positioned the asset near a pivotal threshold.

Technically, XRP is trading around $2.02, having broken below key moving averages. It now sits notably beneath its 50-day average of $2.27. The price action is consolidating within a pattern chartists interpret as either a symmetrical or descending triangle. The $2.00 level represents a major psychological and technical support zone. A decisive break below it could trigger a move toward the $1.85 to $1.94 range. Conversely, overhead resistance is firm between $2.08 and $2.10, a barrier that has recently halted recovery attempts. The Relative Strength Index (RSI) reading of 28.8 indicates the market is in oversold territory, suggesting a potential cooling of selling pressure.

The Fed's Impact and ETF Dynamics

The U.S. Federal Reserve's December 10th policy decision introduced fresh volatility. While the central bank cut its benchmark interest rate by 25 basis points to a range of 3.50% to 3.75%, its accompanying "hawkish" outlook—projecting fewer rate cuts for 2026—created uncertainty across risk assets, including cryptocurrencies.

This macro backdrop coincides with shifting dynamics for U.S. Spot XRP ETFs, launched in November 2025. Recent flow data reveals a notable cooling in institutional demand:
- Net inflows into XRP ETFs dropped to $8.73 million on December 9, down sharply from $38.04 million the previous day.
- The Franklin Templeton XRP ETF (XRPZ) recorded zero net inflows for the first time since its launch, indicating a pause in its previously robust demand trajectory.
- Despite the slowdown, total assets under management for U.S. Spot XRP ETFs remain substantial at approximately $923.7 million.

A contrasting positive development occurred on the institutional infrastructure front. The Bitwise 10 Crypto Index ETF (BITW) successfully uplisted to the NYSE Arca on December 9. Within this index, XRP holds a weighting of about 5.17%, making it the third-largest component behind Bitcoin and Ethereum. This provides a continued source of passive investment into XRP, even as active spot ETF inflows wane in the short term.

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

On-Chain Activity Presents Diverging Signals

Analysis of blockchain data within the Ripple ecosystem paints a mixed picture, highlighting different pressures.

XRP Trading Volume:
- Exchange-based trading volume for XRP has surged by 205%.
- In a declining market, such a volume spike typically confirms the strength of the downward move, suggesting the drop toward $2 is driven by broad market activity rather than thin liquidity.

Ripple Stablecoin (RLUSD) Activity:
- The transaction volume for RLUSD has fallen nearly 60% over the past 30 days to roughly $2.8 billion.
- This decline implies the initial momentum behind the stablecoin protocol has subsided, with liquidity stabilizing at a lower level.

In summary, on-chain metrics show speculative and hedging pressure on XRP itself is intensifying, even as utilization of specific ecosystem components like RLUSD contracts.

Regulatory Landscape and Forward Path

With the major SEC lawsuit settled in early 2025, the regulatory focus for Ripple has shifted toward deeper integration within the U.S. financial system. Two key factors are noteworthy:
- Ripple's pursuit of a U.S. banking license is viewed by some analysts as a potential catalyst that could reverse the current negative trend.
- Concurrently, progress on comprehensive federal market structure legislation remains a critical component for attracting further institutional capital into the crypto sector.

Looking ahead, two immediate conditions will shape XRP's trajectory. In the near term, the defense of the $2.00 support zone is essential to prevent a deeper technical breakdown. Simultaneously, a sustained recovery in ETF inflows—consistently above the $20 million daily threshold—would signal a potential challenge to the current bearish structure. Such a shift could redirect focus toward the next significant resistance area around $2.35.