XRP is trading at a critical juncture, struggling to hold support below the $2.5 mark after weeks of strong selling pressure. Bulls are finding it increasingly difficult to regain control, and overall market sentiment remains weak following a sharp decline in major altcoins. However, some analysts argue that this exhaustion phase could represent a local bottom — a setting that historically precedes strong spikes in XRP’s price.
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According to data shared by CryptoQuant’s analyst CryptoOnchain, the XRP Ledger decentralized exchange (DEX) has shown a striking difference between price and activity. Between October 8 and 17, while the price of XRP fell from around $3.0 to $2.3, DEX trading volume jumped to a multi-month high. This surge in activity, highlighted in the gray area of the chart, signals that despite price weakness, engagement on the chain remains strong.
This type of divergence often causes debate among traders — it can mean either capitulation, where sellers finally give up, or accumulation, where bigger players quietly enter the market. With DEX activity heating up while the price stagnates, the coming days could be decisive for XRP’s next move, as traders watch closely for signs of a potential reversal.
A price-volume divergence signals a market turning point
CryptoQuant Analyst CryptoOnchain stands out that the recent divergence between XRP price and DEX volume can be interpreted in two opposite but crucial ways. The first is capitulation and selling pressure, a bearish scenario where an increase in trading volume during a price decline reflects panic selling. In this case, the surge in activity represents a rush to get out – the capitulation of short-term holders and traders unwilling to sustain further losses. Historically, such events confirm a strong bearish momentum as sellers dominate the market, often leading to temporary breakdowns before stabilizing.
On the other hand, the second option indicates accumulation with smart money. Here, the sudden increase in volume may not be a sign of panic, but strategic positioning by large investors or whales taking advantage of reduced prices. As retail participants sell out of fear, long-term players could absorb the supply, positioning themselves for a potential recovery. This dynamic – the transfer of XRP from “weak hands” to “strong hands” – has historically preceded major reversals.
Ultimately, this period highlights a fierce battle between buyers and sellers. Despite the price decline, the presence of strong buying interest suggests underlying strength. If demand continues to absorb selling pressure, XRP could be the foundation for its next bullish impulse. The $2.3 to $2.5 zone now represents a critical area to watch for signs of accumulation and potential market recovery.
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XRP is trying to stabilize after a sharp selloff
XRP is showing the first signs of stabilization after one of the sharpest corrections of the year. The chart shows that the token has bounced back from lows near $2.3, a level closely aligned with the 100-day moving average — now acting as short-term support. Despite the recovery to around $2.47, the structure remains fragile, with the 50-day moving average moving lower and the price still below the key resistance zone of $2.6-2.7.
This area previously served as strong support before being breached during the recent selloff, suggesting that it may now act as a barrier to continued bullish growth. The broader trend also highlights a significant increase in volatility, reflecting uncertainty among traders. A long lower wick on recent candles indicates that buyers are defending the $2.3 level, but without a clear increase in volume, a sustained reversal remains uncertain.
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If XRP holds above $2.3, a short-term consolidation phase could follow, potentially leading to a retest of $2.6. However, if selling pressure returns and the price falls below $2.3, a deeper pullback towards the 200-day moving average near $1.8 cannot be ruled out. For now, XRP’s outlook depends on whether the bulls can turn this temporary spike into a confirmed recovery.
Featured image from ChatGPT, chart from TradingView.com
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