XRP has experienced a significant decline recently, leaving traders pondering if the worst is finally behind them. Since Q4 2025, the token has seen its value plummet from around $2.80 to approximately $1.42, representing nearly a 50% drop. This dramatic slide has caught the attention of analysts, particularly due to the sharp movements in momentum indicators that often signal key market shifts.

Currently, the daily relative strength index (RSI) for XRP has fallen to an alarming 17, a level not witnessed for over a decade. Such an extreme reading typically indicates oversold conditions and has historically led to strong recoveries. While past performance does not guarantee future results, traders are closely monitoring these patterns for potential bounce-back opportunities.

Historically, XRP has shown resilience after reaching similar RSI levels. For instance, after a significant dip in October, the token rebounded by approximately 70% in just a few weeks. Other instances in mid-2024 and April 2024 also saw gains of around 65% and 35%, respectively, in a matter of days. These patterns suggest that when momentum appears exhausted, buyers tend to step in rapidly, driving prices higher.

As of now, XRP has hit an RSI of 20 on the daily chart, marking it as the most oversold condition in its history. Remarkably, every time XRP has reached such extreme readings, traders have witnessed a bounce of 15-40% within two weeks. This consistent pattern has sparked optimism among some market participants, who are anticipating a relief bounce to the $2.20-$2.50 range.

Market commentator and crypto researcher Ripple Bull Winkle has highlighted these historical patterns, arguing that a bounce in the 15%-40% range is likely based on past behavior. This perspective resonates with a segment of traders who are closely watching for signs of a potential short squeeze or a flush that could eliminate weaker positions in the market.

However, caution is warranted. Relying solely on a single technical signal can be risky. Broader market trends, macroeconomic factors, and the behavior of institutional funds may overshadow these technical cues. For instance, significant short-liquidity zones exist above the $2.25 level and between $4.20 and $4.40, which could trigger rapid price movements if XRP reaches those ranges.

Despite its recent struggles, XRP has not been entirely isolated in the market. The XRP/ETH trading pair has remained relatively stable since August 2025, while the XRP/BTC pair showed signs of recovery after a brief downturn. Additionally, XRP's market dominance has hovered around the 3.5% mark, indicating that it is not collapsing in isolation but rather moving within a broader market context that has been generally weak.

Looking ahead, traders will be paying close attention to trading volumes, daily closes above crucial resistance levels, and whether the RSI can break free from its extreme oversold conditions. A clean breakout above $2.25 could pave the way for further upward targets, while failure to sustain any bounce might keep sellers in control.

As the market navigates this tumultuous period, traders are advised to exercise risk control. Many previous recoveries from deep oversold conditions have been short-lived, underscoring the importance of position sizing and stop-loss rules in the current environment. For now, the market setup presents both opportunities and risks, with the coming days likely revealing whether this is merely a relief bounce or the beginning of a more significant recovery.