XRP tumbled sharply, dropping 7% to $2.05, as institutional selling overwhelmed market support and pushed the digital asset back into November's correction territory. The breakdown shattered a critical technical level that had held for weeks, igniting fears of further declines.
According to ChartNerdTA on X, the token endured seven days of sideways consolidation before the brewing move finally materialized to the downside, dragging XRP back toward its multi-month support zone. The descent came despite robust institutional infrastructure developments and massive exchange-traded fund inflows that reached $666.6 million this month.
The violent sell-off caught traders off guard, as buying pressure from whale accumulation and shrinking exchange supply failed to counteract the institutional exodus. Volume data revealed the scale of the move, surging to 309.2 million—more than 4.6 times the rolling average—signaling genuine distribution rather than temporary volatility.
Critical Support Level Shattered
The breakdown below $2.16 marked a decisive moment for XRP holders. This price point had functioned as a pivot throughout the past three weeks, making its loss a clear indication that sellers reclaimed control of the market structure. The token now trades within a descending channel characterized by consecutive lower highs at $2.38, $2.30, and $2.22. Each attempted bounce has produced weaker follow-through, demonstrating increasing bearish dominance.
Momentum indicators show deeply oversold short-term conditions, yet lack sufficient divergence to suggest the corrective wave has completed. Exchange supply contracted by 45% over the past 60 days, pointing to large-scale accumulation by long-term holders. Whale wallets added 150 million XRP tokens since November 25, even as the recent breakdown unfolded. This divergence between on-chain accumulation metrics and price action creates an unusual dynamic in the current market environment.
The $2.05 to $2.00 zone represents the final line of defense for bulls. Losing this psychological floor would expose the November demand band stretching between $1.80 and $1.87. Multiple intraday retests of $2.05 showed buyers defending the level, with each test accompanied by volume spikes exceeding 3 million tokens. However, no confirmed reversal pattern has emerged.
Derivatives Market Signals Intensifying Pressure
ETF demand proved insufficient to absorb the selling wave as broader crypto benchmarks weakened and market liquidity thinned. The new 21Shares TOXR listing contributed to this month's substantial inflow figures, yet short-term flows turned sharply bearish despite expanding institutional access. Price action unfolded rapidly as XRP fell from $2.21 to $2.05 in a steep 7.2% decline. The most aggressive selling materialized after the $2.16 support level gave way, triggering cascading liquidations into the session close.
Volume confirmation arrived as the metric jumped 464% above the daily average, underscoring intense distribution activity. Hourly candles revealed a descending channel structure with progressively lower highs and tightening range behavior. Multiple recovery attempts near $2.12 failed, indicating persistent selling pressure from larger participants. Buyers repeatedly stepped in at $2.05 to absorb dips but lacked sufficient momentum to reclaim the broken support threshold.
Traders now face a binary outcome scenario. Holding $2.05 becomes critical, as a breakdown would directly expose the $1.87 to $1.80 support band. Alternatively, reclaiming $2.16 with conviction would invalidate the current bearish structure and potentially signal renewed accumulation. The technical setup requires monitoring for bullish divergence on hourly RSI and MACD indicators as potential early reversal signals. A high-volume reclaim of the $2.12 to $2.16 range would confirm that accumulation forces are regaining control. Until that occurs, the path of least resistance remains downward, as sellers maintain structural advantage.