XRP has shown renewed strength by successfully defending its psychological floor of $2.00, setting the technical stage for a potential XRP rally to $2.50 in the near term. Market analyst known as Trader Dom points out that the asset is currently facing a decisive “now or never” moment to reverse its bearish trend and reclaim higher trading levels before the annual close.
During Tuesday’s session, the token experienced a rebound of nearly 6% after tapping liquidity below its key support on Monday. Currently, the price band between $2.28 and $2.30 stands as the fundamental pivot for sustained bullish continuation. A daily close above this zone would confirm a significant structural break, opening a clear path toward the next liquidity cluster located at $2.58, an ambitious target for traders.
This movement occurs in a context of technical compression, where the asset has maintained a downtrend since the month of July. However, the reevaluation of the fair value gap suggests that buyers remain active in key discount zones. Furthermore, futures open interest has collapsed from $8.6 billion to $3.8 billion in the fourth quarter, implying that a directional expansion could unfold rapidly due to thinner positioning in the derivatives market.
On the other hand, funding dynamics present a split scenario that could favor a rally driven by short position liquidations. Analyst Pelin Ay highlights that funding rates remain predominantly negative, indicating that bearish positioning currently dominates futures. If the price manages to reclaim the $2.22 to $2.30 range, a short squeeze could be triggered driving the asset’s value violently upward in the digital economy.
Is This the Definitive Moment for XRP Reversal?
Inverted technical analysis reveals clear signs of fatigue in the bearish trend over the past six weeks, suggesting that a bullish rotation could be underway. To confirm this, it is vital to reclaim the monthly volume-weighted average price located at $2.22. However, experts warn that if this technical setup fails, price acceptance below $2.00 would be the next logical step. Thus, traders must watch current price action closely, as a failure here could result in a complicated year-end.
Likewise, XRP’s historical behavior during the year 2025 has been characterized by forceful moves between extreme liquidity zones. This means that once momentum shifts direction, the asset tends to overshoot intermediate resistances while hunting for fresh liquidity. Therefore, a successful break of the current structure would not only validate the recovery, but could lead the asset to surpass extended targets quickly, making the $2.58 zone a realistic goal.
