XRP’s recent rebound has failed to erase concerns that the token may be heading for another corrective leg.
Despite recovering from February’s sharp selloff and briefly reclaiming the $1.50 level, on-chain and derivatives data suggest that market participants remain cautious, with downside risks still elevated.
The broader crypto market has shown signs of stabilization, but XRP’s internal metrics paint a more fragile picture. Analysts increasingly argue that the recovery lacks strong accumulation signals, leaving the token exposed if selling pressure resumes.
XRP Exchange Inflows and Reserves Point to Elevated Sell-Side Risk
On-chain data indicates that XRP holders have been moving coins toward centralized exchanges at an accelerated pace. According to aggregated blockchain analytics, exchange-held XRP balances have increased steadily since early February, reflecting a rise in near-term sell availability.
While precise wallet-level accumulation remains muted, mid-sized wallets—often associated with retail and swing traders—have been net sellers, contributing to the growing exchange supply.
This behaviour contrasts with stronger market phases, where exchange reserves typically decline as long-term holders withdraw assets into self-custody. The pattern mirrors broader market caution.
During the February downturn, XRP fell more than 13% to around $1.35, before extending losses to approximately $1.13 as whales dumped $50 million tokens daily. Although buyers stepped in at lower levels, exchange inflow trends suggest that many participants used the rebound to reposition rather than accumulate aggressively.
Historically, sustained increases in exchange balances have preceded extended consolidation or further downside, particularly when not offset by visible whale accumulation.
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Futures Market Deleveraging Reinforces Bearish Structure
Derivatives data confirms that XRP’s recent weakness has been driven by deleveraging rather than spot-only selling. XRP futures open interest declined sharply following the February 5 selloff, signaling widespread position closures across major exchanges.
Funding rates have remained neutral to slightly negative, even during price rebounds toward $1.50. This suggests that rallies are largely driven by short covering instead of fresh long exposure. When funding fails to flip decisively positive after a bounce, it often reflects fragile bullish conviction.
Liquidation data further supports this view. Long positions accounted for the majority of forced closures during the downturn, highlighting how leveraged bullish bets were unwound as volatility spiked.
Without a clear recovery in open interest and sustained positive funding, upside momentum remains vulnerable.
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XRP Price Prediction: $0.5 in Focus if $1 Fails
From a higher-timeframe perspective, XRP continues to trade below key resistance zones formed after the loss of the $1.40–$1.30 support range. This area has now flipped into overhead resistance, limiting upside follow-through.
Market analysts note that a decisive break below the $1.00 psychological level could expose XRP to a liquidity gap on the volume profile. Below that threshold, historical trading activity thins considerably until the $0.50–$0.60 region, a zone that previously acted as a consolidation base in November 2024.
XRP community analyst Echo Da Truth has highlighted this level as a realistic downside scenario, emphasizing that deep retracements are common during late-stage corrections and often precede longer-term market resets rather than invalidate the asset’s broader thesis.
At the time of writing, XRP trades near $1.43, down over 10% in the past week with a corresponding 32% decline in the past month. On-chain flows, futures positioning, and market structure suggest that risks remain skewed to the downside.
Until exchange inflows cool and leverage stabilizes, the probability of a deeper correction toward $0.50 remains firmly on the table. Likewise, several analysts expect Bitcoin to touch $50,000 before any major recovery.
