XRP ETF Crash and Price Drop: Market Signs Indicate Further Declines

The XRP price is currently in a delicate position. With an current price of around $1.38, the cryptocurrency has already experienced a significant decline from previous levels. What is concerning is not only the proximity to critical support levels but especially what the market is not doing: the expected buy signals are absent. While technical indicators usually lead to small recovery phases, this time the opposite is happening. This lack of reaction is the biggest warning sign – it indicates a lack of demand.

Divergence Signal Failed: The Promise That Was Not Fulfilled

Between late December and mid-January, a pattern appeared on the daily chart that analysts typically view optimistically: a hidden bullish divergence. The price made a higher low, while the RSI (Relative Strength Index) simultaneously showed a lower low. Theoretically, this divergence signals that selling pressure is waning and buyers could take control.

But reality was different. After the divergence appeared, XRP’s price hardly increased. The price stagnated, and momentum was absent. This is the critical problem: sellers slowed their pressure, but no new buyers stepped in. Such failed signals are often seen in weak markets—they do not indicate strength but rather deep uncertainty.

The conclusion is uncomfortable: when bullish signals fail, it’s usually not the signal itself that’s the problem, but the demand. Additionally, an ascending wedge formation in the chart suggests a possible decline of about 25 percent if support levels break. With no buyers and sellers gradually regaining control, even a small downward move could trigger a much larger crash.

ETF Crash Shows: Institutional Demand Is Fading

The answer to the question of the missing demand lies in capital flows. Recently, a worrying trend emerged for the first time in weeks: outflows from XRP-related ETF products. Compared to previous weeks of regular inflows, this turning point marked a clear shift in sentiment. ETF flows are so indicative because they reflect large, targeted capital movements—when these turn negative, it almost always signals a pause or retreat by institutional investors.

On-chain data reinforce this picture. The metric “XRP Hodler Net Position Change” measures the monthly balance of long-term holders. This metric has flattened and is beginning to decline slightly. This does not indicate aggressive selling, but also not accumulation—the classic strategy of investors during weak phases. After the divergence signal, long-term holders did not increase their positions. This lack of buy-in confirms what the price action has already shown: buyers lack confidence.

The combination of declining ETF inflows and stagnant hodler volume is problematic. Under such conditions, recovery phases are extremely difficult. The market is in a state of lack of confidence.

Whale Activity Accelerates Downward Pressure

While institutional buyers hesitated, another group acted: large wallets holding between 10 million and 100 million XRP. These addresses significantly reduced their positions. The holdings of this wallet category decreased, amounting to a reallocation of about $170 million—an enormous sum adding additional selling pressure to the market.

This selling activity also explains why XRP did not react to the bullish divergence signal. Whale activity amplifies what ETF data already indicate: there is an imbalance between supply and demand. Sellers hold the upper hand, while buyers are only marginally present.

From a technical perspective, the risk is now clearly quantifiable. A daily close below $1.35 would break the wedge support and activate the downside target. This could open the way toward the $1.20 zone, with potential for further declines down to $1.10. Such a decline would approach or even surpass the originally projected 25 percent drop.

Price Targets and Outlook: Where Is the Path Leading?

On the upside, XRP needs to recover at least $1.50 to ease immediate downward pressure. This could bring short-term relief but would likely only constitute a technical rebound—not the start of a new uptrend. As long as new buyers do not appear, any recovery remains temporary and vulnerable to new sell-offs.

The current market picture is clear: there are sellers in the form of whales and ETF outflows. However, convincing buyers are absent. Under these conditions, the downside risk remains dominant. The ETF crash, combined with stagnant hodler positions and active whale sales, creates a perfect storm for an accelerated price decline. Investors should take these warning signs seriously—they have proven to be reliable indicators of upcoming volatility in the past.