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XRP continues to struggle with selling pressure that keeps the token trapped in a month-long downtrend leading into February. The recent sharp decline has reinforced negative sentiment, affecting spot markets and related investment products.
This weakness is also carried over into XRP exchange-traded funds (ETFs), where fluctuations underscore ongoing investor caution. However, signs of stabilization have appeared below the surface, which will determine whether the price of XRP will decline further or recover.
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XRP ETFs have yet to see an improvement
The XRP spot ETF recorded net flows of $404,690 on Monday even though it closed the previous week on a positive note, recording $16.79 million on Friday. The improvement in ETF flows was reversed at the beginning of this week, indicating a return of selling pressure.
This turnaround shows that the overall decline has not completely disappeared, since on Thursday, January 29, XRP ETFs recorded flows of 92.92 million dollars, the largest since the launch. This session coincided with a broader market collapse A 9% drop in the price of XRP.
Stable flows provide essential support to restore market confidence, which is a basic requirement for any recovery in the XRP price. However, broader sentiment remains fragile as doubts about the continued recovery continue to weigh on investor expectations.
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Saturated losses can prevent sales
The chain’s data show that short holders face significant unrealized losses. The net profit and loss ratio for STH is currently at -0.38. This represents the deepest level of loss since July 2022 and the highest level in three and a half years. This reflects the widespread surrender between Recent XRP buyers.
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Despite the negative aspect, the increase in STH losses can reduce the risk of immediate sales. Short-term holders are historically reactive, often selling quickly during profitable periods. As losses deepen, incentives to sell weaken.
This dynamic could temporarily suppress the supply, giving the XRP price room to stabilize and try to recover if the demand improves.
The price of XRP is possible
The price of XRP is trading It is close to $1.62 at the time of writing, and is below the $1.70 resistance. The altcoin has been in a steady downward trend since the beginning of January. Last week’s 16% decline reinforced the bullish structure, keeping XRP below key moving averages and limiting upward momentum.
However, these two factors suggest that a short-term recovery is still possible. The first is that short-term holder losses appear to be saturated, which reduces distribution risk. The second is that the momentum indicators show that XRP has been oversoldwhich increases the possibility of a technical rebound towards $1.79.
The Money Flow Index is currently near the oversold limit. Decisive investments in overvalued territory are often preceded by sales. In a similar setup earlier, XRP rose 14% in 48 hours. If broader market conditions remain supportive, a similar reaction could occur during this attempted recovery.
However, downside risks persist if upside momentum fails. He can offer a rejection as low as $1.70 XRP to renew selling pressure . In this scenario, the price may drop to $1.54 or even $1.47. The loss of these support levels will invalidate the bullish hypothesis and prolong the continuation of the decline.
