XRP Signals Bottom; Bulls Target Rebound

What to Know:

• Key takeaway #1 — XRP has shown signs of a potential bottom after recovering from a recent low, suggesting a possible sustained recovery.
• Key takeaway #2 — Data indicates a drop in XRP supply on exchanges, extreme lows in funding rates, positive spot taker CVD, and steady ETF inflows.
• Key takeaway #3 — These factors suggest reduced selling pressure, a potential short squeeze, strong buyer demand, and persistent institutional interest in XRP.

XRP has demonstrated resilience by bouncing back from a 15-month low, prompting speculation about a potential price bottom. Several indicators, including decreasing exchange supply, negative funding rates, and positive ETF flows, point toward a possible sustained recovery for XRP. These factors suggest a shift in market sentiment and renewed interest in the digital asset.

Falling XRP supply on exchanges is bullish

The amount of XRP held on exchanges has significantly decreased over the past two years, as shown by Glassnode data. This drop suggests that holders are less inclined to sell, potentially boosting XRP’s future value. The XRP balance on exchanges is now at levels last seen in May 2021, indicating a shift in investor behavior.

Additional data from CryptoQuant shows a sharp decline in Binance’s XRP reserves, which further supports the idea of reduced selling pressure. According to CryptoQuant contributor PelinayPA, this decline in reserves, coupled with the price remaining near its lows, increases the likelihood of a short squeeze scenario.

XRP funding rates fall to extreme lows

Funding rates for XRP on Binance have plunged to -0.028%, the lowest since April 2025, coinciding with a price drop to $1.12. Negative funding rates, combined with falling spot prices, often indicate oversold conditions and potential short squeezes. This situation arises from overcrowded short positions and capitulation among leveraged longs.

Historically, these extreme negative funding rates have signaled potential bottoms, as the market becomes oversold and ripe for a rebound. Similar conditions in April 2025 led to a 65% rally as short positions were squeezed out. The current setup suggests a possible price reversal if buying pressure returns.

How do spot XRP ETF inflows influence price?

Spot XRP exchange-traded funds (ETFs) in the U.S. have consistently attracted investor interest, recording inflows on 53 out of 59 days. This sustained institutional demand since their launch in November 2025 highlights a strong belief in the long-term potential of XRP. These inflows indicate that institutions are accumulating XRP, even during market downturns.

Despite global crypto investment products experiencing outflows, XRP ETPs have bucked the trend, emerging as top performers with significant inflows. This reinforces the steady institutional demand for XRP-based ETPs, even as the market price has weakened. The continued inflows into XRP ETFs suggest a positive outlook for the digital asset.

What does XRP spot taker CVD data indicate?

Analyzing the 90-day spot taker cumulative volume delta (CVD) reveals a resurgence in buy orders, signaling increased demand for XRP. The CVD measures the difference between buy and sell volume over a three-month period, providing insights into market sentiment. A positive CVD indicates that buyers are more aggressive than sellers.

The CVD recently turned positive, indicating a rebound in demand and a shift in control towards buyers. If the CVD remains positive, it suggests that buyers are accumulating XRP at lower levels, potentially setting the stage for another upward movement. This shift in market dynamics could lead to further price appreciation for XRP.

Analyzing XRP Ledger activity and derivatives data

The XRP Ledger has seen increased activity, indicating growing adoption and usage of the network. This increased activity can be attributed to various factors, including new partnerships, integrations, and technological advancements. A more active ledger often correlates with a healthier ecosystem and increased demand for XRP.

Derivatives data shows a decrease in XRP futures open interest, suggesting that leverage traders are reducing their exposure. This reduction in leverage can lead to more stable price action and reduce the risk of sharp price swings. A more balanced derivatives market can contribute to a more sustainable recovery for XRP.

These factors combined suggest that XRP is positioning itself for a potential recovery, supported by strong fundamentals and growing institutional interest.

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Source: Original article