XRP Chaos: ETF Outflows Foil Rebound-Cosmic Price Pinch

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XRP continues to behave as though it wandered into a hitchhiker’s guide to the cosmos, stubbornly stuck in a month-long downtrend as February flaps its sleeves. A recent dramatic pullback has only sharpened the chorus of doom, like a choir of accountants nervously adjusting their neckties in zero gravity.

The malaise has also wandered into XRP exchange-traded funds (ETFs), where flow volatility performs a rather alarming impression of a nervous kettle. Investor caution persists, though there are faint signs of stabilization lurking beneath the surface, ready to decide whether XRP will slide further into the velvet void or stumble toward a notional ascent.

XRP ETFs Are Yet To Do Better

Spot XRP ETFs posted net outflows of $404,690 on Monday despite closing the previous week on a positive note, recording $16.79 million on Friday. The improvement in ETF flows was reversed as this week began, signaling a comeback of selling pressure.

The shift shows that the macro bearishness hasn’t vanished completely, given that on Thursday, January 29, XRP ETFs recorded $92.92 million in outflows, the largest since launch. That session coincided with a broader market crash and a 9% drop in XRP price.

Stabilizing flows offer much-needed support for restoring market confidence, a key requirement for any XRP price recovery. However, broader sentiment remains fragile, as doubts about a sustained rebound continue to weigh on investor outlook.

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Saturating Losses Could Prevent Sell-Off

On-chain data shows short-term holders facing heavy unrealized losses. The STH Net Unrealized Profit and Loss metric currently sits at -0.38. This marks the deepest loss level since July 2022 and a three and a half year high. This reflects widespread capitulation among recent XRP buyers.

Despite appearing negative, rising STH losses may reduce immediate selling risk. Short-term holders are historically reactive, often selling quickly during profit periods. With losses deepening, selling incentives weaken.

This dynamic can temporarily suppress supply, giving XRP price space to stabilize and attempt a recovery if demand improves.

XRP Price Bounceback Likely

XRP price is trading near $1.62 at the time of writing, sitting below the $1.70 resistance. The altcoin has remained in a steady downtrend since early January. Last week’s 16% decline reinforced bearish structure, keeping XRP below key moving averages and limiting upside momentum.

However, these two factors suggest a short-term rebound remains possible. The first is that the short-term holder losses appear saturated, lowering distribution risk. The second is that momentum indicators show XRP is oversold, increasing the probability of a technical bounce toward $1.79.

The Money Flow Index currently sits near the oversold threshold. A decisive dip into oversold territory often precedes reversals. In a similar setup previously, XRP surged 14% within 48 hours. If broader market conditions remain supportive, a comparable reaction could unfold during this recovery attempt.

However, downside risk persists if bullish momentum fails to materialize. A rejection below $1.70 may expose XRP to renewed selling pressure. Under this scenario, the price could fall to $1.54 or even $1.47. Losing these support levels would invalidate the bullish thesis and extend the ongoing decline.

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2026-02-03 14:36