The market is certainly not moving during the holidays: volatility is low, volumes are relatively calm and there generally seems to be nothing that can disrupt the calm of the holiday season. However, it is important to evaluate the state of multiple assets at once to determine the true picture we are going to see heading into the new year.
Shiba Inu keeps tumbling
At first glance, Shiba Inu’s recent price movement appears ugly, but context is important. SHIB has been steadily declining for weeks, pushing momentum indicators far into oversold territory. It was not a random decline. Broader market weakness, waning speculative interest and a lack of follow-through following prior bounce attempts were the main causes. In other words, sellers maintained control long enough to wear themselves out.
The fact that SHIB now appears stretched is crucial. The price has been trading significantly below its short- and midterm moving averages on the daily chart, and the RSI has remained close to levels that have historically coincided with at least brief relief rallies. This indicates that the downside pressure is lessening, but it does not necessarily indicate that a bull run is about to begin. Selling is still happening, but it is less impulsive, slower and more cautious.
Notably, there has been a recent stabilization close to local lows. SHIB is now chopping sideways, with tiny green candles creeping in instead of printing aggressive lower lows. That kind of behavior frequently indicates that weak hands have already left.
This theory is supported by volume, which has not significantly increased during the most recent leg lower, despite the protracted downtrend. That is normal when you are close to exhaustion. It would be premature to declare this a complete recovery, though. SHIB is still below all significant resistance levels, and the overall trend is still negative.
A proper recovery would require the price to recover and hold at least one important moving average, preferably with a discernible increase in volume. Any upward move runs the risk of being just another dead-cat bounce without that confirmation. However, the probability balance has changed a little. While long-side bets, if handled carefully, make more sense close to these levels than they did higher up, the risk-reward ratio for shorts is worse than it was a few weeks ago.
XRP feeling better
XRP is stealthily transitioning from a state of survival to one of recovery. The asset is exhibiting early indications that the downward cycle is losing control, following months of continuous pressure. This is a structural shift that frequently precedes more powerful moves later on, rather than a euphoric breakout or a hype-driven bounce.
Stabilization is the most significant development. Without accelerating downward, XRP has been grinding along the lower edge of its descending channel. Rebounds are becoming more regular, but every new low is only slight. That is typically what occurs when sellers run out of options and there is no more downside liquidity. The market is no longer setting prices aggressively out of fear.
Momentum indicators are consistent with that opinion. The fact that the RSI is still muted, but not collapsing, indicates that selling pressure is being absorbed rather than increasing. Volume also provides a useful narrative: quieter trading that prioritizes accumulation over panic exits has replaced the strong distribution spikes that were observed earlier in the decline. This is not an announcement, this is how bottoms are made.
It would be premature to declare this a confirmed bull market because XRP is still below important moving averages from a structural standpoint. However, once sentiment shifts, price compression close to support and declining volatility frequently create the conditions for abrupt directional changes.
Since there is less overhead resistance now than there was during the distribution phase, if XRP is able to regain short-term averages, the recovery may proceed swiftly.
Instead of expecting the grind to continue, investors should expect volatility to increase. Because the downside momentum is weak and the upside reactions are beginning to travel farther than previously, the risk-reward profile is improving. Longer-term positioning is precisely drawn to this asymmetry.
Bitcoin’s serious deviation
The current state of the Bitcoin market raises serious concerns that go beyond price. Volume is the bigger problem. After the recent decline, BTC has been able to stabilize and even exhibit a slight upward bias, but trading activity has been steadily decreasing. It is important that they diverge. Price and volume typically move together in healthy trends, particularly in the vicinity of possible reversals.
Weak conviction is frequently indicated by rising or stabilizing prices with decreasing volume. Although there are buyers, they are cautious, gradual and not assertive enough to support a long-term move. This results in a brittle structure where the price can hold for a while but lacks the momentum to rise significantly.
After a steep sell-off, Bitcoin is consolidating on the chart, creating a comparatively narrow range close to local lows. The issue is that volume has not increased throughout this consolidation. The market is becoming quieter rather than displaying accumulation through greater participation. This makes Bitcoin susceptible to abrupt fluctuations, should even slight selling pressure resurface.
But context is important. There may be more to this volume contraction than just a technical flaw. The timing coincides with the Christmas season, when all markets usually experience a decline in liquidity. Large players refrain from making capital commitments until regular trading conditions return, institutional desks slow down and retail activity declines.
Bitcoin is currently in a holding pattern. Volume does not provide assurance, and price by itself does not confirm anything. It is important for traders to exercise caution when interpreting stability as strength. Whether participation recovers along with price will probably determine the next significant move.
