XRP Flashing Reversal Signals as Critical Support Level Holds Strong

XRP is currently trading around $2.10, up marginally over the past day while gaining over 10% on a weekly basis. This price action reveals something interesting beneath the surface. Despite recent weakness, the technical setup suggests a potential inflection point is forming. The key question: can XRP defend its crucial support zone? If it does, traders should watch for a meaningful recovery opportunity.

A Textbook Bullish Divergence Emerges on the Daily Timeframe

The most compelling signal right now is the emergence of a bullish divergence pattern on XRP’s daily chart. Between early December and mid-December, the price carved out lower lows while the Relative Strength Index (RSI) — a momentum oscillator tracking buying versus selling intensity — formed higher lows. This divergence represents a classic reversal setup.

Here’s why it matters: when momentum indicators improve while prices weaken, it typically indicates that sellers are losing steam. The buying pressure isn’t as exhausted as the price action suggests. For daily timeframe traders, this type of divergence can signal a shift from downtrend to uptrend, though confirmation is absolutely necessary.

The chart pattern alone doesn’t guarantee success. Everything hinges on whether XRP can keep price above one critical level.

The $1.97 Floor: Where Large Holders Are Protecting Their Positions

That critical support level sits at $1.97. XRP has repeatedly bounced from this zone, and on-chain metrics reveal why. Glassnode’s cost basis heatmap shows a concentrated band of XRP acquisitions between $1.97 and $1.98, representing approximately 1.79 billion tokens.

This cluster is significant because it represents genuine holder conviction. When large positions were accumulated at these prices, those holders become economically incentivized to defend them. They’re unlikely to capitulate and sell at losses, which naturally strengthens support here. As long as XRP maintains a daily close above $1.97 while RSI remains resilient, the bullish divergence thesis stays intact.

$2.17 Represents the First Major Hurdle in a Potential Upside Move

Should support hold, the next target emerges near $2.17 — approximately 9% above current levels. This resistance zone matters because the supply dynamics tell a story. The cost basis heatmap reveals significant XRP accumulation between $2.16 and $2.17, totaling around 1.36 billion tokens.

When price reaches levels where many people bought, selling interest naturally appears. Holders in that zone have smaller profit margins or are breakeven, so they tend to liquidate positions. This creates visible overhead resistance. Clearing $2.17 with conviction would open paths toward $2.28, then $2.69, and potentially $3.10 — though these extend beyond the immediate tactical picture.

The Downside Scenario Remains Clear

The reversal setup has defined invalidation points. A daily candle close below $1.97 would break the divergence thesis and likely trigger additional selling toward $1.81 and $1.77. These levels represent the next critical support zones if the current framework fails.

XRP stands at a fork in the road. The technical ingredients for a bounce are present, but execution depends entirely on price action respecting that $1.97 floor over the coming sessions.