Why did XRP price fall below $2? Technical analysis reveals key support levels and institutional target prices

XRP price is currently fluctuating in the $1.85–$1.88 range, having broken below the key psychological threshold of $2. As of December 31, its monthly decline is approximately 6.72%, and the annual decline is 12%. Over a broader time horizon, compared to the near-3.50 USD high in July 2025, XRP has retraced about 47%. Year-to-date, its performance has lagged behind mainstream cryptocurrencies like Bitcoin and Ethereum.

Current Market Performance

According to data from the Gate platform, XRP prices have continued to face pressure in year-end trading. In the last week of December, XRP traded within a narrow range of $1.84 to $1.90, with market liquidity remaining decent but lacking enough buying support to push prices above the mid-high $1.80 region.

As of December 31, XRP’s market capitalization was approximately $113.7 billion, with a 24-hour spot trading volume of $55.34 million. This indicates that the market is not lacking liquidity but is undergoing a cautious price re-evaluation under risk-averse sentiment.

Analysis of Downward Drivers

XRP’s recent drop below the $2 threshold occurred in a typical risk-averse environment, resulting from a combination of macro and micro factors. Year-end market liquidity is usually thin, stock markets are weak, and the upcoming release of the December policy meeting minutes by the Federal Reserve also suppresses demand for risk assets. Higher interest rates and a strong dollar increase the opportunity cost of holding volatile assets like XRP.

When prices break through key psychological levels like $2, it often triggers further selling pressure, forming a “selling in a downtrend” rather than a sustainable breakout. Regarding capital flows, although spot XRP ETF products have maintained net inflows for 30-33 consecutive trading days since launch, accumulating around $1.1 to $1.2 billion, these structural supports have not yet translated into short-term upward momentum.

In-Depth Technical Analysis

From a technical perspective, XRP is in a clear downtrend channel, with multiple key indicators signaling caution. On the daily chart, since early October, XRP has been confined within a descending channel, with each rebound encountering resistance near the upper boundary of the channel. This pattern suggests that if support levels are effectively broken, prices could fall further by approximately 41%.

Key technical levels provide a clear delineation of bullish and bearish zones. The first major support is at $1.79; a daily close below this level would increase downside risk. Further declines could test intermediate supports at $1.64 and $1.48, with the $1.27 level being the theoretical target of the downtrend channel. Resistance above includes the $1.98–$2.00 zone, which combines psychological and technical resistance, while the $2.05–$2.10 and $2.28 levels are critical supply zones that need to be broken.

Institutional Views and Market Sentiment

Not all voices in the market are pessimistic; some financial institutions hold a positive outlook on XRP’s long-term prospects. Standard Chartered predicts that XRP could reach $8 by 2026. This forecast is based on two main catalysts: potential net inflows of $4–8 billion into spot XRP ETFs by 2026, and the resolution of the SEC lawsuit against Ripple, which would remove regulatory uncertainty.

A more optimistic long-term scenario assumes favorable macroeconomic conditions and sustained risk appetite, with XRP potentially reaching $12.50 by 2028. On the other hand, bearish views focus on changing market sentiment. According to CryptoQuant, a market sentiment index built from media articles, on-chain data, and various sentiment indicators shows that current market consensus has generally turned bearish.

Historical experience suggests that when consensus becomes overly uniform, markets often reverse. However, analysts also warn that this “index pessimism” phase could last for some time.

Bulls and Bears Battle

The current XRP market exhibits a complex tug-of-war between bullish and bearish forces, with distinct behaviors among different holder groups. Long-term holders seem to be accumulating during the price decline. Data shows that on December 27, long-term wallets increased by about 9.03 million XRP, and by December 29, this number grew to approximately 15.90 million XRP, with nearly 76% of that increase occurring within 48 hours. Meanwhile, mid-term holders with a holding period of 1–3 months are also increasing their positions, rising from 9.58% of the total supply on November 29 to 12.32% on December 29.

Whale addresses (holding between 100 million and 1 billion XRP) show the opposite trend. They reduced their holdings from 8.23 billion XRP to 8.13 billion XRP on December 28, selling about 1 billion XRP, worth roughly $185–$190 million at current prices.

While the market is focused on whether XRP can hold the critical support at $1.79, on-chain data reveals an interesting divergence: long-term holders are quietly accumulating, while some whale accounts are reducing their holdings. This “retail accumulation, whale distribution” pattern causes each rebound attempt to encounter resistance within the downtrend channel, creating a complex tug-of-war. As the market awaits clearer signals on Federal Reserve policy, XRP may continue to fluctuate within a broad two-year range of $1.58 to $3.50. The institutional forecast of $8 remains a long-term outlook based on assumptions of massive ETF inflows and macroeconomic improvements.