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The price of XRP tried to stabilize after a strong selling wave that included the entire market. The token temporarily fell near $1.50 before rebounding towards $1.61, following the widest collapse between January 31 and February 1. On the surface, this looks like a technical rebound and perhaps the beginning of something bigger.
Chain and flow data suggest that this recovery is weak. Buyers supporting XRP right now rely mostly on short-term traders. Broader demand has been weak. Three indicators explain why this rebound may fail.
Short-term investors are driving the recovery – and that’s a risk
Commerce XRP price So far in a long-term channel that has been active since the beginning of July.
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The last bounce occurred near the lower border of this channel, around $1.50. This level attracts buyers who support the price. But who bought it is more important than the location of the bounce itself.
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This is where HODL Waves indicators become important. HODL Waves tracks how long investors hold their currencies. It shows which groups increase or decrease their exposure.
Recent data shows that the group of short-term traders from the week to the month led most of the buying. Its share of the XRP supply increased from about 1.99% to 5.27% between January 31 and February 1. This represents a huge jump in just two days.
This represents a sharp increase in speculative ownership.
Historical data shows why this situation is so dire. When he arrived XRP for the peak Close to $2.35 on January 5, the same group held about 4.83% of the supply. When the price fell, they quickly reduced their stake to about 2.15%. This wave of selling helped push the price of XRP towards $1.65 in the following weeks.
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Buy on dips and sell early, these traders usually do. Do not hold coins in times of uncertainty.
This group can be repaid, meaning that current support is based on quick capital rather than long-term conviction. If the XRP price meets resistance, it can break out of this group again and cause a new downward wave.
Coin flows from platforms decrease as overall buying weakens
The second caveat comes from platform flow data.
Follow the coin flow to see how many coins are leaving the exchange. When currencies move off the exchanges, this usually indicates a long-term buy or hold. While flows indicate selling pressure. Strong recoveries are often supported by higher flows during downturns, which demonstrate the emergence of new demand.
XRP reflects the opposite pattern.
On January 31, exchange flows were 31.38 million XRP. In early February, it fell to around 9.81 million. This represents a drop of about 70%. While XRP retreated about 14% from its peak in late January, this happened Movement.
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Buying pressure weakens instead of accelerating during the decline.
The importance of this is that it shows price support from only a limited group of traders, namely the speculators highlighted earlier. Broader market participants did not increase their exposure. So if the short holders start selling, there won’t be enough new orders to absorb the supply.
This creates a fragile structure. The price may hold temporarily, but remains weak. Without stronger flows, the rebounds tend to fade.
Weak buyers and key price levels make XRP vulnerable
The final risk concerns the absence of long-term and “convinced” investors.
The HODL waves show that the longer categories, especially the two to three year category, have not returned. This group had more than 14% of the supply at the end of 2025, and now it has fallen to about 5.7% and is stable. No purchase was recorded even when the price fell sharply.
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These investors are used to accumulating during the major fund. Its absence indicates that the market does not yet consider the current levels attractive for long-term income. Their lack of conviction is consistent with the price structure.
Now define several levels XRP forecast.
For the upside, $1.69 represents the first big barrier. Returning indicates improved confidence. Above it, the $1.96 level emerges as a decisive factor. A sustained move above this level may challenge the downward channel and could change the trend to neutral.
On the upside, the vital support area remains at $1.47-$1.50. If these levels fail, the target will open towards $1.25. This confirms the collapse of the channel and indicates an additional decrease of about 27% to reach $0.93. As long as XRP trades between $1.47 and $1.69, uncertainty prevails.
The latest bounce shows selling pressure slowing. But the upside potential is limited by weak stock flows, the fragmented behavior of holders, and the absence of high-conviction buyers.
The price of XRP is now being held by the same group of traders who usually sold it first in the past. Unless the wider purchasing appetite and the return of long-term engagement, this support could become the cause of the acceleration of the next recession.
