XRP saw a 4% rebound on Friday, recovering from a sharp mid-week correction that tested investor confidence. While on-chain data revealed declining network activity and record profit-taking, key indicators suggest the recent pullback may be setting the stage for a powerful resurgence. With funding rates normalizing and technical structures forming, market observers are asking: could this dip be the springboard for XRP’s next major rally?
👉 Discover how market cycles could be aligning for a breakout move in XRP.
Mixed On-Chain Signals: Activity Drops Amid Whale Divergence
Despite short-term price recovery, XRP’s on-chain metrics paint a nuanced picture of investor sentiment. Weekly active addresses — a key gauge of network engagement — dropped by over 180,000, falling from a year-to-date high of 495,000 to just 312,000 by week’s end. This decline suggests that much of the recent activity was driven by speculative trading rather than organic utility growth.
This trend underscores a broader pattern: while retail interest surged during XRP’s price climb, real-world adoption on the XRPLedger has yet to accelerate at the same pace. For long-term bullish momentum to sustain, increased usage in cross-border payments and DeFi integrations will be critical.
At the same time, whale behavior has been split. Small-scale whales (holding 1 million to 10 million XRP) added approximately 180 million XRP to their wallets during the week, signaling accumulation at current levels. In contrast, large-scale whales (10 million to 100 million XRP) reduced their holdings by over 340 million XRP — likely taking profits amid volatility.
Despite this outflow from major holders, spot exchange data reveals a bullish undercurrent: XRP outflows exceeded inflows during the week. This indicates that investors are moving tokens off exchanges, potentially into long-term storage — a classic sign of confidence in future price appreciation.
Moreover, realized profits hit nearly $2.2 billion** over the week, with **$1.4 billion cashed out on Wednesday alone after XRP rebounded from $1.91. This marks the second-highest profit-taking event since 2021 and highlights strong conviction among traders who entered earlier positions. If XRP regains upward momentum, additional profit-taking could occur near key resistance zones — but only after breaking through psychological barriers.
Key Developments: RLUSD Launch and ETF Speculation Fuel Optimism
Amid market fluctuations, fundamental developments continue to strengthen XRP’s ecosystem.
Ripple Labs received regulatory approval from the New York Department of Financial Services (NYDFS) to launch RLUSD, its U.S.-dollar-backed stablecoin. Set to debut on both the XRP Ledger and Ethereum blockchain, RLUSD aims to enhance liquidity across decentralized finance (DeFi) platforms. By enabling seamless value transfer within the XRPLedger’s low-cost infrastructure, RLUSD could drive new demand for XRP as a bridge asset in multi-chain environments.
👉 Explore how stablecoin integration might boost native token utility across blockchains.
In parallel, speculation around an XRP exchange-traded fund (ETF) has gained traction. Crypto influencer Ben Armstrong (Bitboy Crypto) pointed to a 300% increase in Grayscale’s XRP Trust since its September launch — rising from $10.85 to $48.27 per share. While no formal ETF filing is pending, growing institutional interest through trusts may lay the groundwork for future regulatory acceptance.
Funding Reset Paves Way for Potential Breakout
One of the most encouraging signs for XRP bulls is the normalization of funding rates. According to Coinglass data, rates dropped from a peak of 0.096% on December 5 to just 0.012% by Friday, following significant liquidations over the past two weeks. High funding rates often precede sharp corrections due to excessive leverage; their reset now reduces downside risk and creates favorable conditions for renewed buying pressure.
Technically, XRP is forming a flag pattern on the daily chart — a continuation structure that typically precedes strong directional moves after consolidation. A decisive close above the upper boundary of this channel, particularly above $2.58**, could trigger a rally toward **$4.78, which would represent a new all-time high.
However, resistance looms near the $3.00 psychological level, where previous selling pressure has emerged. Overcoming this zone will require strong volume and sustained bullish momentum.
Indicators support the upside case:
- The Relative Strength Index (RSI) remains above 50, reflecting ongoing bullish momentum.
- The Stochastic Oscillator also shows upward trajectory, with no signs of overbought conditions yet.
A daily candlestick close below $1.96, however, would invalidate the current bullish thesis and suggest further downside risk.
Frequently Asked Questions
What is Ripple and how does it relate to XRP?
Ripple is a fintech company focused on cross-border payments using blockchain technology. Its network, RippleNet, enables fast and low-cost international transfers for financial institutions. XRP serves as the native digital asset of the XRPLedger and is used to facilitate these transactions efficiently.
What is the XRPLedger?
The XRPLedger is an open-source, decentralized blockchain designed for fast and scalable transactions. Unlike proof-of-work blockchains, it uses a consensus protocol that consumes minimal energy and settles transactions in seconds. It also features built-in mechanisms to prevent spam and DDoS attacks.
How does XRP differ from other cryptocurrencies?
XRP is engineered specifically for institutional use in global payments. It operates on the Interledger Protocol (ILP), allowing interoperability between different financial ledgers — even non-blockchain systems. This makes it uniquely positioned to connect banks and payment providers across disparate networks.
Is an XRP ETF likely in 2025?
While no official application has been filed with the SEC, growing interest through products like Grayscale’s XRP Trust suggests institutional demand is rising. Regulatory clarity following Ripple’s ongoing legal battle with the SEC will likely determine whether an ETF becomes feasible.
Why do funding rates matter for XRP price action?
Funding rates reflect the cost of holding leveraged positions in perpetual futures markets. When rates spike, it signals over-leverage and potential correction risk. A reset to neutral levels — as seen recently — clears excess speculation and sets the stage for healthier price growth.
Can XRP reach $5 in 2025?
Reaching $5 would require a combination of favorable regulation, broader DeFi adoption on XRPLedger, and sustained bull market conditions across crypto. While ambitious, such a target becomes more plausible if RLUSD drives ecosystem growth and spot demand outpaces selling pressure.
👉 Learn how macro trends and tokenomics could influence XRP’s long-term trajectory.
Conclusion
XRP’s recent pullback has tested market resolve, but underlying metrics suggest resilience. Declining active addresses and profit-taking reflect natural market cycles after rapid gains. Meanwhile, whale accumulation, exchange outflows, and normalized funding rates hint at a potential buildup phase ahead of another rally.
With RLUSD launching soon and ETF speculation gaining momentum, fundamental tailwinds are aligning. Technically, a breakout above $2.58 could unlock significant upside toward $4.78 or beyond — provided broader crypto sentiment remains positive.
For investors watching XRP closely, patience may be rewarded. The slingshot effect often follows sharp corrections — especially when fundamentals remain strong.
Core Keywords: XRP, Ripple, XRPLedger, funding rates, active addresses, RLUSD, ETF speculation, price prediction