Despite showing classic technical signs of a market bottom, XRP’s price recovery remains stalled. The asset is caught between encouraging on-chain data and persistent structural headwinds, creating a conflict that has prevented a sustained rebound.
Signs of a Potential Bottom
Several key metrics suggest that seller exhaustion may be nearing its peak, a condition that often precedes a market bottom. A critical on-chain indicator, the Short-Term Holder Net Unrealized Profit/Loss (STH-NUPL), has fallen to around -0.30, its lowest reading this year. This pushes it into the “capitulation” zone, where most recent buyers are holding at a loss and are likely too emotionally drained to sell further. Historically, similar though less severe readings of -0.13 in April and -0.15 in June were both followed by price bounces.
However, another metric suggests the washout may not be complete. The “spent coins” data, which tracks how many coins from different age groups are being moved, recently saw a 112% increase during a price drop. While this indicates capitulation, it is far below the 416% spike observed in early November, which marked a clear local bottom. This implies that the current selling pressure from a broader set of holders may not have fully played out yet, requiring one final flush before a true recovery can begin.
The Headwinds Capping a Recovery
Even with these potentially bullish signals, XRP faces significant structural challenges that are neutralizing upward momentum.
A primary factor is its sensitivity to broader market weakness. Bitcoin’s recent break below key support levels and the appearance of a “Death Cross” on its chart have created a risk-off environment across the entire crypto market. In such conditions, altcoins like XRP, which often act as high-beta assets, tend to get dragged down by Bitcoin’s momentum, overshadowing their own individual technical signals.
Furthermore, the market is grappling with persistent selling pressure. Recent trading sessions have been defined by heavy selling at key resistance levels, particularly between $2.28 and $2.30. The failure to break through this ceiling has led to concentrated liquidations of leveraged long positions, amplifying downward moves. For instance, in a single 24-hour period, long liquidations accounted for a significant portion of over $28 million in total liquidations, creating a headwind for any recovery attempt.
Finally, a disconnect between corporate developments and token price action is affecting market psychology. Despite Ripple securing a $500 million funding round at a $40 billion valuation—a strong sign of institutional confidence in the company—the price of XRP remained stagnant. This highlights a market reality where positive corporate news for Ripple does not automatically translate to immediate demand for the XRP token, especially when traders are focused on low on-chain settlement volumes and liquidity.
In summary, XRP is at a technical crossroads. While the data indicates a potential bottom is forming, the journey to a sustained recovery hinges on a change in these key dynamics. The market needs to see a decisive break above key resistance, a stabilization in Bitcoin’s price to improve overall sentiment, and, ultimately, concrete evidence of growing on-chain utility to build a stronger foundation for the next leg up.
