• XRP rebounds above key $2.40 support in tandem with other crypto majors on Thursday.
• XRP inflows into the Binance exchange decline significantly amid potential bear exhaustion.
• Traders start piling into long positions as the XRP futures Open Interest weighted funding rate steadies.

Ripple (XRP) rises above $2.40 at the time of writing on Thursday, following two consecutive days of declines. The token briefly corrected, with the intraday candle wick reaching $2.35 earlier in the day, as a bearish wave spread across the cryptocurrency market. 

If retail interest steadies in upcoming sessions, the uptrend could extend toward short-term resistance at $2.62 and later the psychological $3.00 level. 

XRP shows signs of stability as selling pressure eases 

XRP inflows into the Binance exchange increased in October, peaking at approximately 362 million tokens last Saturday. The surge coincided with the largest deleveraging event in the history of the industry and the subsequent flash crash in the XRP price to $1.25.

Traders often transfer assets to exchanges with the intention of trading or selling. Hence, the surge in inflows likely contributed to selling pressure. However, with inflows reducing this week, as shown in the chart below, a potential shift in sentiment could pave the way for a sustained recovery in the XRP price. 

XRP Ledger Exchange Inflows - Binance | Source: CryptoQuant 

Meanwhile, the XRP derivatives market has stabilized, with the futures Open Interest (OI) weighted funding rate flipping positive. According to CoinGlass data, the OI funding rate averages 0.0015% on Thursday, following a historical dip to -0.2045% on Saturday. 

If an uptrend develops above the mean line in the coming days, as traders increase their exposure to XRP longs, it will suggest improved sentiment and boost the short-term bullish outlook.

XRP OI-Weighted Funding Rate | Source: CoinGlass

Technical outlook: Can XRP bolster its recovery?

XRP is trading above a short-term support established at $2.40, as cryptocurrencies post marginal gains on Thursday. This subtle uptick reflects the increase in retail demand along with the drop in exchange inflows. 

If bulls tighten their grip, traders could anticipate a breakout above the 200-day Exponential Moving Average (EMA) at $2.62 on the daily chart and increase the odds of the price of XRP rising toward the $3.00 level.

XRP/USDT daily chart

Still, with the Moving Average Convergence Divergence (MACD) indicator maintaining a sell signal on the same daily chart, triggered on Thursday, downside risks remain.

The downward-trending Relative Strength Index (RSI) at 33 suggests the bearish momentum is increasing. Hence, the short-term support at $2.40 must hold to prevent the down leg from stretching to sweep more liquidity at $2.22, a level tested in early June.