XRP Hits Potential Bottom: Signs Bulls May Seize Control

XRP has staged a remarkable 50% rebound, climbing to a peak of $1.67 after touching a 15-month trough at $1.12 on February 6. Although the cryptocurrency’s current intraday value hovers around $1.43, which is still over 60% shy of its all-time high of $3.66, various on-chain indicators and market signals point toward that $1.12 level potentially marking the recent bottom, paving the way for a prolonged upward trajectory in XRP’s price.

Key takeaways:

• The amount of XRP held on exchanges has reached its lowest point in five years, as investors have shifted their holdings into personal wallets, which could indicate diminishing selling pressure in the market.
• Funding rates have plunged to exceptionally low levels, hinting at the possibility of a price floor forming.
• Positive cumulative volume delta on the spot market, coupled with consistent inflows into exchange-traded funds, demonstrates robust buying interest from both retail participants and institutional players gearing up for a recovery.

XRP: Price drawdown from all-time highs. Source: Glassnode

Falling XRP supply on exchanges signals bullish momentum

Over the last two years, data from Glassnode highlights a significant reduction in the quantity of XRP stored on centralized exchanges. As of Tuesday, the exchange balance for XRP had fallen to 12.9 billion tokens, a figure that aligns with the levels observed back in May 2021.

XRP balance on exchanges. Source: Glassnode

This downward trend in exchange-held tokens typically reflects holders’ reluctance to offload their assets in the near term, which often serves as a strong bullish indicator that could bolster XRP’s prospects for future price appreciation.

Further insights from CryptoQuant indicate that reserves of XRP on Binance have experienced a steep decline, now sitting at approximately 2.57 billion XRP. Both the 50-day simple moving average and the 100-day simple moving average are trending downward, reinforcing this pattern.

“Technically, reserves are declining while price remains near the lows,” noted CryptoQuant contributor PelinayPA in a recent Quicktake analysis published on Monday. This dynamic heightens the chances of a short squeeze materializing in the coming period, where short positions could be forced to cover, driving prices higher.

XRP reserve on Binance. Source: CryptoQuant

XRP funding rates drop to unprecedented lows

On Binance, funding rates for XRP dipped to -0.028% when the price bottomed out at $1.12 on February 6, marking the lowest such rate since April 2025. When paired with declining spot prices, these deeply negative funding rates are indicative of an overcrowded short positions landscape and the capitulation of leveraged long traders.

In historical contexts, such extreme negative funding environments have frequently heralded the formation of price bottoms or the onset of short squeezes, as the market reaches oversold conditions that prompt a reversal.

For instance, comparable funding rate conditions in April 2025 led to a substantial 65% surge, propelling XRP from $1.60 to $2.65, primarily as short sellers were compelled to exit their positions en masse.

XRP ledger funding rates. Source: CryptoQuant

Likewise, similar market setups observed in late 2024 resulted in abrupt upward price movements, as traders hurried to unwind their leveraged bets amid shifting sentiment.

At the same time, open interest in XRP futures has contracted to about $2.53 billion as of Tuesday, representing a 55% decrease from the highs of $4.55 billion seen in early January, according to data from CoinGlass. This pullback in open interest implies that leveraged traders are scaling back their involvement instead of piling into fresh positions, which underscores fading bearish momentum and opens the door for a potential price turnaround should buying enthusiasm pick up.

XRP spot taker CVD indicates surging buyer activity

A review of the 90-day spot taker cumulative volume delta (CVD) shows that taker buy volumes have once again taken precedence over sells. The CVD metric quantifies the net difference between buying and selling volumes executed by takers over a 90-day window.

Up until late yesterday, the CVD had stayed in neutral territory, mirroring a state of market uncertainty and balanced forces.

However, this key indicator shifted to positive territory on Tuesday, as evidenced by the green bar in the accompanying chart, signaling a resurgence in buying demand where market participants are stepping in to absorb supply.

Should the CVD continue to display positive readings, it would suggest that buyers are aggressively accumulating XRP at these depressed price levels, potentially laying the groundwork for the next phase of upward price action, much like what has unfolded during past recovery cycles.

XRP spot taker CVD. Source: CryptoQuant

Spot XRP ETFs see steady inflows amid market downturn

Exchange-traded funds tracking spot XRP in the United States have maintained strong appeal to investors, achieving inflows on 53 out of the past 59 days. This consistent performance highlights unwavering institutional appetite for XRP since these products debuted in November 2025.

On Friday alone, spot XRP ETFs recorded net inflows of $4.5 million, pushing the total cumulative inflows to $1.23 billion and elevating assets under management to more than $1.01 billion, as per data from SoSoValue.

Spot XRP ETF flows data. Source: SoSoValue

In a broader context, while global cryptocurrency investment vehicles experienced their fourth consecutive week of outflows amounting to $173 million, XRP exchange-traded products stood out by posting $33.4 million in inflows for the week ending February 13, making them the leading performer in the category.

These developments further affirm the reliable institutional backing for XRP-linked investment vehicles, persisting even as the asset’s spot price faced downward pressure.