XRP rises as ETF inflows persist, but low retail demand may limit recovery

XRP ETFs gain on growing institutional demand

Interest in XRP spot Exchange-Traded Funds (ETFs) continues to expand, as reflected by the sixth consecutive day of inflows, totalling $7.5 million on Tuesday. Bitwise and Canary Capital ETFs accounted for all the inflows, totaling roughly $6 million and $1.45 million, respectively.

Meanwhile, cumulative inflows are at $1.25 billion for the second day, with net assets steady around $1 billion in the same period, according to SoSoValue data. Notably, inflows indicate that appetite for risk assets such as XRP is improving despite uncertainty stemming from the war in the Middle East.

The XRP derivatives market aligns with the overall bearish trend, as futures Open Interest (OI) declines to $2.11 billion on Wednesday, from $2.25 billion the previous day.

In contrast, XRP futures OI peaked at $10.94 billion in July and is currently at its lowest level since January 2025. This persistent downtrend suggests that traders have lost confidence in XRP’s ability to sustain an uptrend, which may explain their adamance to open new positions and increase exposure. A steady increase in OI is required to support short-term price rebounds.

On the other hand, Ripple is leveraging recent acquisitions, including Palisade for custody and treasury automation and Rail for virtual accounts and collections, according to a recent internal report.

Ripple’s solutions now enable customers to collect, hold, exchange, and complete payouts in both fiat and stablecoins on a single unified platform.

The blockchain company believes that for global finance to evolve, “fintechs and financial institutions need infrastructure that treats digital assets with the same rigor as traditional finance,” said Monica Long, President at Ripple.

Technical outlook: XRP mild rebound seeks support

XRP has risen to hold above $1.40 from the daily low of $1.35, with the near-term tone staying mildly bearish. The price holds below the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), which continue to slope lower and frame a broad downtrend. Moreover, the SuperTrend indicator remains above spot at $1.61, reinforcing an overall bearish trend despite the recent stabilization over the descending resistance line – now turned immediate support.

Meanwhile, momentum remains fragile rather than capitulative, with the Moving Average Convergence Divergence (MACD) hovering above its signal on the daily chart, while the Relative Strength Index (RSI) at 45 points to a neutral but slightly improving technical picture.

Initial resistance is aligned near $1.43, where the daily high lies, followed by the February 6 hurdle at $1.54. A daily close above the $1.54 supply zone would soften the bearish bias and expose the 50-day EMA at $1.57 as the next upside objective. On the downside, immediate support emerges around $1.33, the weekly low, with further demand at $1.27, which aligns with Saturday's low.

Open Interest, funding rate FAQs

How does Open Interest affect cryptocurrency prices?

Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.

How does Funding rates affect cryptocurrency prices?

Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.

(The technical analysis of this story was written with the help of an AI tool.)

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