According to TheCryptoBasic, XRP has entered a multi-month descending channel structure following a turbulent final quarter of 2025, prompting analysts to outline both bullish and bearish price scenarios from current levels.
The analysis highlights that XRP, alongside the broader crypto market, faced intense selling pressure during Q4 2025. After reaching a high near $3.10 in early October, the asset suffered a sharp reversal, losing the $3 and $2 psychological levels before closing the year at approximately $1.84. This marked XRP’s first annual bearish candlestick since 2022, representing an 11.51% yearly decline.
Breakdown Below Key Resistance Defined the Downtrend
TheCryptoBasic notes that a critical technical failure occurred in late October when XRP faced strong rejection in the $2.70–$2.75 region. This area, which previously acted as support, flipped decisively into resistance following the rejection. After briefly recovering toward $2.70 on October 27, XRP failed to sustain momentum, triggering prolonged losses throughout the remainder of Q4.
This rejection confirmed the formation of a descending channel, a structure characterized by lower highs and lower lows. As shown in the chart, XRP continued to print successive lower highs during the downtrend, reinforcing bearish market structure and signaling sustained seller control.
Early 2026 Recovery Signals Emerging Momentum Shift
Despite the broader downtrend, TheCryptoBasic reports that bullish momentum has begun to reappear in early 2026. XRP has recovered more than 10.7% within the first three days of the year and has reclaimed the $2 level for the first time in three weeks.
Short-term price action suggests that XRP is now forming higher lows after retesting support at the lower boundary of the descending channel. This support zone is identified between approximately $1.60 and $1.77. According to the analysis, this behavior indicates a possible short-term trend flip, even as the asset remains inside the broader descending structure.
Bullish Scenario: Break Above Channel Resistance
In the bullish case presented by TheCryptoBasic, XRP would need to maintain its current upward momentum and decisively break above the descending channel’s upper trendline. This resistance currently sits near the $2.10 level.
If this breakout occurs, XRP could then attempt a move toward reclaiming the $2.70–$2.75 resistance zone. A successful recovery of this area would signal a macro structural shift back to bullish conditions, potentially invalidating the multi-month downtrend.
Bearish Scenario: Rejection Risks Deeper Pullback
Conversely, the bearish scenario assumes XRP fails to break above the upper channel resistance. In this case, price could roll over and revisit the lower boundary of the channel. TheCryptoBasic identifies the next major downside support around the $1.60 level, a price last seen in April 2025.
While this outcome would extend the descending channel, analysts emphasize that momentum compression is occurring regardless of direction. This suggests that a volatility expansion could be approaching, with a decisive move likely once XRP exits its current range.
Momentum Compression Signals Upcoming Volatility
Regardless of whether the bullish or bearish scenario unfolds, TheCryptoBasic stresses that XRP is currently building momentum. The tightening price structure within the descending channel indicates that volatility may soon increase, making the next breakout or breakdown critical for defining XRP’s direction in early 2026.
