XRP has gained more than 45% since its local low of $1.59 on April 7, rising to $2.31 as of May 27. However, it remains 31% below its January 2025 peak of $3.40, raising questions about whether the rally has run out of steam.
A major red flag for XRP bulls is the drop in futures market momentum. XRP’s open interest (OI) in futures has declined to $3.2 billion, down nearly 10% from its three-month peak of $3.52 billion on May 13.
This suggests that fewer traders are betting on further price increases, reducing the capital inflows needed to sustain momentum.
At the same time, XRP funding rates (the fees paid between long and short positions in perpetual contracts ) have hovered around neutral (0%) since February. This shows a lack of strong conviction in either direction from traders. When combined with falling open interest, it suggests caution rather than optimism.
Institutional Money Pulling Out
On the institutional side, demand is clearly shifting elsewhere. According to CoinShares, XRP investment products saw weekly outflows of $37.2 million, the highest among all digital assets. This snapped an impressive 80-week streak of net inflows.
Despite attracting over $10.5 million inflows in the previous weeks, XRP products have lost $28.6 million in institutional capital so far this month. Meanwhile, other major assets such as Bitcoin, Ethereum, and Solana are seeing strong inflows of $2.9 billion, $326 million, and $4.3 million respectively.
The shift away from XRP points to a broader reallocation of institutional funds, weakening its price support. As earlier reported by Nitadel, 83% of institutional investors plan to increase their crypto exposure in 2025, per a Coinbase study in early January.
XRP Price Analysis: Bearish Chart Signals
Technically, XRP is trading within a descending triangle on its 4-hour chart, a pattern known for signaling bearish reversals. This triangle has been forming since May 14 and is defined by a flat support level near $2.28 and a downward-sloping resistance line.
The price is struggling to stay above the 200-day simple moving average (SMA), currently at $2.18. If the bears succeed in pushing XRP below this level, it could fall to the triangle’s support at $2.28 and if that breaks, a drop to $1.96 is likely by the end of May.
Some analysts even see a deeper dip to $1.61 as possible if key supports continue to break. Despite the gloomy outlook, a breakout above the triangle’s upper resistance at $2.35, which also aligns with the 50-day SMA could flip the sentiment.
If that happens, XRP might regain bullish momentum and target the psychological $3.00 level.But for now, the data suggests traders and institutions are hedging their bets elsewhere. Without a strong catalyst or shift in sentiment, XRP’s rally may be running on fumes.
