XRP Price Drop Possible, Analysts Reveal

What to Know:

• Key takeaway #1 — XRP is showing bearish signals, with analysts predicting a potential drop to $0.70-$1 based on technical indicators.
• Key takeaway #2 — Despite price weakness, spot XRP ETF inflows remain strong, reaching $1.23 billion cumulatively, indicating continued institutional interest.
• Key takeaway #3 — Whale accumulation and a surge in active addresses on the XRP Ledger suggest potential for a price reversal, contrasting with the bearish technical outlook.

XRP is currently exhibiting bearish signals, according to market analysts. Technical charts suggest a possible decline to the $0.70-$1 range. However, strong ETF flows and whale accumulation offer countervailing bullish indicators for XRP.

Where will XRP price bottom?

According to Chart Nerd, previous fractals from the monthly Gaussian Channel indicator suggest that XRP could drop lower in the coming weeks or months. The Gaussian Channel is a technical analysis indicator used to identify trends and spot potential support and resistance levels. The chart indicates that whenever the XRP price rallied, it corrected to retest the upper regression band of the Gaussian Channel, which is currently at $1.16.

Historically, this has led to three to four months of further decline towards the middle regression band of the Gaussian Channel before marking a foundation and continuing the trajectory higher. The analyst noted that the middle regression band currently ties up around $0.70, a level that previously acted as year-long resistance in 2023/2024 and hasn’t been backtested for support. This bearish scenario will be validated if XRP drops below the local lows of $1.12.

Institutional Demand and ETF Flows

Despite the bearish price action, institutional demand for XRP remains robust. Spot XRP ETFs have seen cumulative net inflows of $1.23 billion since their launch in late 2025. A recent $3.26 million inflow marked the fifth consecutive day of inflows, bringing total assets under management to $1.01 billion. These persistent inflows highlight institutional confidence in XRP, potentially counteracting the negative technical signals.

This continued institutional interest is a critical factor to consider. Strong ETF flows can provide a cushion against downward price pressure and signal a long-term bullish outlook. The ongoing accumulation by institutional investors suggests they see value in XRP despite the current market conditions, providing a counterbalance to the bearish technical analyses.

XRP Ledger Activity and Whale Accumulation

Recent on-chain data reveals significant whale activity and a surge in active addresses on the XRP Ledger. Transactions involving over $100,000 in XRP have spiked to four-month highs, reaching 1,389 transactions. Additionally, the number of active addresses on the XRP Ledger suddenly ballooned to 78,727 in just one 8-hour candle, marking the highest level in six months.

These metrics are often seen as bullish indicators, suggesting a potential price reversal. Whale accumulation, in particular, indicates that large holders are buying XRP during the price dip, signaling confidence in its future prospects. The increase in active addresses reflects growing network usage and engagement, which can contribute to positive price momentum. These factors could provide support against further price declines.

How Might Derivatives Data Impact XRP?

Derivatives data, such as funding rates and open interest, can provide insights into market sentiment and potential price movements for XRP. High positive funding rates often indicate an overleveraged long position, increasing the risk of a long squeeze. Conversely, negative funding rates suggest a bearish sentiment, where short positions are paying longs, potentially signaling a bottom.

Open interest in XRP futures and options can also be informative. A rising open interest alongside a rising price typically confirms an uptrend, while a declining open interest during a price decrease may indicate weakening bearish conviction. Monitoring these derivatives metrics can help traders gauge market sentiment and anticipate potential price swings, adding another layer of analysis to the technical and on-chain data.

Volatility and Liquidity Considerations

Volatility in the cryptocurrency market, especially for assets like XRP, can significantly impact trading strategies and investment decisions. High volatility presents both opportunities and risks, requiring careful risk management. Liquidity, or the ease with which XRP can be bought or sold without significantly affecting its price, is another crucial factor. Low liquidity can amplify price swings and increase the risk of slippage.

Traders should consider volatility and liquidity when assessing potential entry and exit points. Monitoring order book depth and trading volume can provide insights into XRP’s liquidity. Additionally, using tools like Average True Range (ATR) can help quantify volatility levels. Understanding these dynamics allows for more informed trading decisions and better management of potential risks associated with XRP investments.

Despite bearish technical signals, strong ETF inflows and whale accumulation suggest potential for price stabilization in XRP. Monitoring these conflicting signals is crucial for understanding the future trajectory of XRP.

Related: XRP Signals Market Reset, Price Target

Source: Original article