XRP Faces Critical Test as Key Price Level Breaks

A stark divergence defines XRP's position in early December 2025. On one hand, institutional adoption is accelerating, marked by record inflows for newly launched spot ETFs and approval from asset management giant Vanguard. On the other, the technical picture has deteriorated sharply, with the price breaking below a crucial psychological threshold amid rising bearish bets. The tension between long-term fundamental support and immediate selling pressure is becoming acute.

Contrasting the weak price action is significant demand from traditional finance. Since their launch in November, spot XRP exchange-traded funds have accumulated nearly $850 million, representing one of the most successful altcoin ETF debuts to date.

Adding to this momentum is Vanguard's decision to enable trading of these products starting December 2025. Ripple CEO Brad Garlinghouse has pointed to these developments, alongside a more favorable regulatory environment in the U.S., as evidence of a structural shift that should provide long-term support. Market experts caution, however, that these fundamental tailwinds may not be sufficient to counteract the current technical downtrend in the short term.

Technical Structure Shows Significant Weakness

The cryptocurrency breached the critical $2.07 support level on December 5. Initial signs of stabilization proved to be a bear trap, as sellers consistently used any recovery attempts as exit opportunities, creating a pattern of lower highs.

Volume dynamics are particularly concerning. Trading activity spiked by almost 70% above average during the period of downward pressure, indicating the break below $2.07 was driven by substantial selling rather than random market noise. Momentum indicators, including the RSI and MACD, corroborate this negative trend, suggesting bears are currently in control of the market's direction.

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

On-Chain and Market Data Flash Warning Signs

Beyond the price chart, underlying network metrics are also raising alarms. Data from CryptoQuant reveals the "Ledger Velocity"—a measure of how frequently tokens change wallets—has surged to its highest level in 2025. Analysts often interpret such spikes as precursors to heightened volatility, signaling coins are moving out of long-term storage and into active trading.

Additional headwinds are emerging from South Korea. Holdings on the Upbit exchange have swelled to over 6 billion XRP tokens, a yearly peak. Historically, Korean investors have utilized such large exchange balances for profit-taking or distribution. Concurrently, short sellers are dominating the derivatives market, reflected in negative funding rates. Market observers note this combination increases the likelihood that the price will need to retest the zone around $2.00.

Outlook Hinges on a Key Defense

The immediate trajectory for the remainder of December now hinges on the $2.05 mark. A successful defense of this support could pave the way for a recovery attempt toward the $2.11 zone, provided it is accompanied by increasing volume.

However, a sustained drop below this level risks a deeper correction toward the $1.90 area. In the current environment, the weight of technical sell signals and elevated exchange supplies appears to be outweighing the positive long-term implications of ETF inflows.