$XRP sits in one of those unusual phases where the market keeps signalling weakness on the surface while deeper structural flows quietly hint at something more complex beneath the chart. The latest attempt to lift above the familiar $2.05 ceiling did show a brief spark of momentum, with volume surging nearly seventy percent above average during the early hours, but the move immediately deflated. The retrace exposed how fragile short-term conviction has become, and the price slipped back into the same tightening structure that has defined the last several sessions. Even with periodic breakout attempts, the broader picture still reflects a controlled downtrend rather than any meaningful shift in sentiment.
The weekly performance turning negative by more than seven percent has only added to this pressure. Traders have spent most of early December watching XRP grind downward in a measured fashion, reinforcing the view that the market lacks the fuel necessary for sustained upside. Yet the fundamental backdrop tells a very different story. U.S. spot XRP ETFs continue to pull in substantial net inflows, now sitting at just over nine hundred million dollars with not a single day of outflows since launch. That steady accumulation contradicts the weakness seen on exchanges, suggesting that while short-term traders rotate out, institutional allocators remain quietly committed.
Sentiment metrics offer another layer of contrast. Social discussions around XRP have fallen into extreme fear territory, matching the pessimism seen at the October lows. Commentary is skewed overwhelmingly bearish. Historically, these exact moments have coincided with rebound points, including the sharp recovery witnessed in late November. It does not guarantee a repeat but does highlight how stretched emotions have become as price compresses within its descending channel.
On-chain behavior adds nuance to this picture. Mid-term holders in the six to twelve month range have been reducing exposure noticeably, dropping from more than twenty six percent of supply to around twenty one percent. That rotation likely contributes to the persistent selling pressure visible on lower timeframes. At the same time, long-term demand tied to ETF flows continues to accumulate, absorbing supply gradually and countering what might otherwise have been a much sharper decline.
Technically, the chart remains heavy. The failed push to $2.07 captured attention only briefly before being erased. Volume faded rapidly on the way down, reinforcing a narrative of exhaustion rather than continuation. Successive lower highs on the sixty minute chart confirm the descending structure, and each rally attempt has been sold into almost immediately. The area between $2.04 and $2.05 has now turned into a clear distribution zone. Sellers defend it aggressively, preventing the market from establishing any foothold above it. Momentum indicators across intraday timeframes lean downward, keeping the trend biased to the downside even as the weekly TD Sequential hints at the early stages of a potential reversal.
The most recent session saw XRP trade within a tight range of just under three percent, oscillating between $2.02 and $2.07 before settling near $2.032. The late-night breakout was driven by nearly forty five million in trading volume, but the lack of follow-through allowed the entire rally to unwind. When price later dipped toward $2.029, the volume profile showed just over one million traded at the low, a sign of distribution rather than accumulation. Buyers were not stepping in with conviction, leaving the pivot around $2.030 as the next critical level to assess. Keeping this area intact is important, as a clean breakdown opens the door toward $2.025 and potentially the broader $2.020 zone.
For traders navigating this setup, the message is clear. Short-term momentum remains fragile and technically aligned to the downside. Fundamentals offer support but have not yet translated into price strength. To shift the intraday structure, XRP must reclaim $2.035 first and then secure a decisive move above $2.05 to invalidate the descending channel. Until that happens, the path of least resistance remains lower. A drop through $2.030 increases the likelihood of another test toward $2.020, with the psychological $2.00 level positioned as the final protective barrier before wider downside levels activate.
Despite the pressure, sentiment extremes and accumulating institutional flows suggest that the market may be approaching an inflection zone. These environments often produce short-term recovery attempts, though timing them requires patience and confirmation rather than anticipation. As it stands now, XRP continues to drift within a controlled decline, waiting for either a technical trigger to break the pattern or a shift in trader behavior strong enough to challenge the prevailing trend.
