XRP continues to face sustained selling pressure as it enters February locked in a month-long downtrend, with bearish sentiment dominating both spot markets and investment products. A sharp pullback in recent sessions has reinforced downside momentum, keeping XRP capped below key resistance levels and raising questions about whether the current weakness represents continuation — or a potential base-building phase.
ETF Flows Reflect Fragile Investor Confidence
Selling pressure has spilled over into spot XRP exchange-traded funds (ETFs), where flows remain volatile. On Monday, XRP ETFs recorded net outflows of $404,690, reversing the positive momentum seen late last week, when inflows reached $16.79 million on Friday.
This shift suggests that broader macro bearishness has not fully faded. Notably, on January 29, XRP ETFs experienced $92.92 million in outflows, the largest single-day withdrawal since launch. That session coincided with a broader crypto market sell-off and a 9% drop in XRP price, highlighting the close relationship between ETF flows and market sentiment.
While stabilization in ETF flows would be a key step toward restoring confidence, current data shows investors remain cautious, limiting the strength of any near-term recovery attempt.
Short-Term Holders Deep in Losses
On-chain data provides further insight into XRP’s current market structure. The Short-Term Holder (STH) Net Unrealized Profit/Loss metric has dropped to -0.38, marking the deepest loss level since July 2022 and a multi-year extreme. This indicates that a large portion of recent XRP buyers are now holding at significant unrealized losses.
Historically, such conditions can signal capitulation among short-term participants. While this appears negative on the surface, it may also reduce immediate selling pressure. Short-term holders are typically more reactive during profitable periods, but as losses deepen, the incentive to sell often diminishes, temporarily suppressing supply.
If demand improves, this dynamic can provide XRP with room to stabilize and attempt a rebound.
Price Structure and Technical Outlook
At the time of writing, XRP is trading near $1.62, remaining below the $1.70 resistance zone. The asset has been in a consistent downtrend since early January, with last week’s 16% decline reinforcing bearish market structure. XRP continues to trade below key moving averages, limiting upside momentum.
However, two factors suggest a short-term rebound remains possible. First, short-term holder losses appear increasingly saturated, reducing distribution risk. Second, momentum indicators show XRP approaching oversold conditions.
The Money Flow Index (MFI) is hovering near the oversold threshold. Historically, similar setups have preceded short-term reversals. In a comparable instance, XRP rallied approximately 14% within 48 hours. If broader market conditions remain supportive, a technical bounce toward $1.79 cannot be ruled out.
Downside Risks Still in Play
Despite these stabilization signals, downside risk remains elevated. A failure to reclaim $1.70 could invite renewed selling pressure. Under this scenario, XRP may revisit support at $1.54, with a deeper decline toward $1.47 if bearish momentum accelerates. A breakdown below these levels would invalidate the short-term recovery thesis and extend the ongoing downtrend.
As XRP navigates this critical zone, ETF flows, on-chain behavior, and momentum indicators will remain key variables shaping the next directional move.
This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and assume full responsibility for any investment decisions.
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