XRP's ETF Inflow Streak Isn't Enough: Can the $1.26 Support Hold?
XRP seems stuck despite three weeks of positive ETF inflows, with institutional confidence waning. The $1.26 support level is critical if XRP is to avoid a deeper fall.
In a world where crypto prices often move with the speed and unpredictability of a rollercoaster, XRP is opting for a different ride: the merry-go-round. With its price moving mostly sideways over the past week, the market seems unsure of its next step. Sure, the past three weeks have seen positive inflows into XRP spot ETFs, suggesting some institutional backing. But a closer look reveals cracks beneath the surface, raising questions about how long this support can truly last.
ETF Inflows: A Mirage of Strength?
On the surface, inflows to XRP spot ETFs look promising. For three consecutive weeks, institutional investments poured in, seemingly reinforcing XRP's potential. February 6 saw inflows totaling $36.04 million. Fast forward to February 20, and those figures dwindled to a mere $1.84 million. That's a staggering 95% drop in just a few weeks.
You might ask: If inflows are positive, why the concern? Well, positive doesn't always mean strong. The declining inflows hint at fading institutional confidence. Add to this XRP's dip below its weekly Volume Weighted Average Price (VWAP) on February 18, and things seem shaky. For big money players, the VWAP is a key benchmark. When prices fall below it, institutions might find themselves in the red, becoming less inclined to buy more.
Are the Bears Lurking?
It doesn't take an expert to see that XRP's price action is flirting with danger. February 18 marked a drop below the VWAP, often signaling institutional losses. Historical trends show that when XRP dips below this line, it can lose up to 26% of its value, a nightmare scenario for investors.
But the plot thickens. A hidden bearish divergence is brewing. Between February 6 and 20, while XRP's price failed to reach new highs, the Relative Strength Index (RSI) soared. Rising momentum without a price increase often points to a dwindling comeback strength, suggesting that XRP could face a harsher downtrend if it fails to rebound past $1.439.
Dip Buying: A Flicker of Hope?
So, why hasn't XRP's price plummeted yet? Enter the dip buyers. Exchange net position change data shows that on February 18, massive outflows of 71.32 million XRP suggested strong buying pressure. But by now, that figure has dropped by 41% to 41.69 million XRP.
The Money Flow Index (MFI) offers another clue, showing that between February 6 and February 19, real capital flowed into XRP even as prices sank. Here we see a curious paradox: while pressure wanes, the buying hasn't stopped entirely. So, is this dip buying enough to keep the ship afloat?
The Critical $1.26 Support: Make or Break
All eyes are on a cluster of cost basis data showing critical support at $1.26. Over 159 million XRP were bought at this level, forming a strong support base. Should this hold, XRP might avoid a deeper plummet beyond 12% even if it slips below the immediate support zone of $1.35 to $1.37.
But caution is warranted. If XRP falls past the $1.26 mark, prepare for heightened selling pressure with potential downsides targeting $1.162 and $1.024. Meanwhile, a recovery demands pushing past not only $1.439 but extending to $1.670 to shift the current bearish momentum.
XRP's journey is at a crossroads. With institutional inflows slowing and critical support levels under siege, the crypto isn't out of the woods. Will the dip buyers hold the line? Or will the bears seize control and drive XRP into deeper waters?
