XRP successfully held the psychological support level of $2 this week, rebounding nearly 6% on Tuesday after a brief liquidity sweep on Monday. Although the asset remains in a multi-month downtrend since July, the resistance zone of $2.28-$2.30 has now become a key pivot point for determining the continuation of bullish momentum.

Key Points:

If the daily close can break above $2.30, it will confirm a structural breakout, potentially driving the price towards the $2.58 area.

XRP has been fluctuating violently between various liquidity ranges in 2025, increasing the likelihood of a massive rebound.

Slightly negative funding rates and weakening open interest indicate that the market is still in a bearish state, but if it can regain stability in the $2.22-$2.30 range, it may trigger a trend reversal driven by short squeezes.

XRP rebounded to $2.17 after previously touching the fair value gap (FVG) below $2, which was formed during the rebound from $1.80 on November 21. This retest indicates that buyers remain active in the discount price area, even amid a broader downtrend.

Structurally, XRP continues to form lower highs, but the compression pattern below $2.30 resembles a consolidation formed under a major decision point.

If the daily close can break above $2.30, it will mark the first trend change since July, confirming a bullish breakout structure and opening a clear path to the next liquidity cluster at $2.58. Market analysts note that the area between $2.34 and $2.42 is marked as a seller's fair value gap, where early profit-taking may occur.

However, XRP's historical price behavior in 2025 is characterized by strong moves from one extreme liquidity area to another. This means that once momentum shifts, XRP tends to break through intermediate resistance levels, actively seeking liquidity, making $2.58 a more likely extension target.

The Relative Strength Index (RSI) is slightly leaning bullish, and regaining stability above the 200-period Simple Moving Average (SMA) will provide strong technical confirmation. Meanwhile, open interest in futures has plummeted from $8.6 billion in the fourth quarter to $3.8 billion, indicating that when a directional breakout occurs, price movements may be more rapid and violent due to thinner market positions.

Analyst Pelin Ay emphasizes that XRP's funding rates remain predominantly negative, indicating that short positions dominate the futures market. As prices and funding rates decline in tandem, market sentiment further reinforces the downtrend, increasing the likelihood of a retest of the $2.00-$1.90 area unless the market structure changes.

Pelin Ay points out that if the funding rate falls below -0.01, the path for XRP to move down to the $1.90 area will become clearer. However, persistently deepening negative funding rates typically appear before liquidity hunting actions. In this case, XRP may briefly consolidate before breaking above $2.30.

Meanwhile, cryptocurrency trader Dom has noticed signs of a market reversal. He states that by inverting XRP's chart, it is clear that a distinct triple exhaustion pattern has formed over the past six weeks, indicating that the current trend is fatigued.

The market has finally formed higher lows, and Dom believes that if the price can regain the monthly rVWAP (relative volume-weighted average price) at $2.22, it will signal that a bullish rotation is underway, potentially driving the price towards the $2.50 area. However, he warns:

Related: XRP ETF inflows exceed $756 million, bullish divergence suggests trend reversal

This article does not constitute any investment advice or recommendation. All investment and trading activities carry risks, and readers should conduct their own research before making decisions.

Original: “XRP Faces 'Now or Never' Moment as Traders Eye Rally to $2.50”

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