XRP Faces Bearish Pressure After Falling Below $2.23 – ETF Demand Offers Possible Support

As of the latest updates, XRP has continued its downward trend on the daily chart, forming another red candle due to ongoing selling pressure. Currently, XRP is trading around $2.05, reflecting a decline of approximately 2.35% within the last 24 hours. However, trading volume has surged nearly 196%, reaching around $3.27 billion, indicating increased market engagement.

Key Takeaways

XRP's price has dipped below $2.23, sparking bearish trends.
On-chain data shows significant capital outflows from exchanges, suggesting potential accumulation by investors.
ETF inflows into U.S. XRP products have demonstrated substantial institutional interest, counterbalancing price declines.
Technical analysis indicates a bearish stance for XRP, with critical support at $1.90 and resistance near $2.11.

Ripple's XRP

Exchange Outflows Suggest Accumulation

Recent on-chain data reveals a notable trend of capital moving off exchanges. According to CoinGlass, Ripple's XRP Spot Netflows have turned negative, with approximately $22.43 million withdrawn from exchanges in the past day. This shift signals potential accumulation, as investors are likely withdrawing tokens in response to the declining price.

XRP Spot Inflow/Outflow Source: CoinGlass

Derivatives positioning has also shed light on key price battlegrounds. Data indicates that traders have constructed $36.15 million in Cumulative Long Liquidation Leverage near the price of $2.017, establishing an essential support zone. Conversely, Cumulative Short Liquidation Leverage has reached about $21.06 million near $2.113, marking a nearby resistance area. Traders are now focused on whether the price will move toward these liquidity clusters.

XRP Exchange Liquidation Map Source: CoinGlass

ETF Inflows Provide Counterbalance

Interest from traditional markets has also emerged as a notable factor. As reported by SoSoValue, U.S. Spot XRP exchange-traded funds (ETFs) experienced a daily net inflow of $4.93 million on January 9th, contributing to cumulative net inflows that approached $1.22 billion. This influx reflects ongoing institutional participation despite short-term price weakness.

U.S. spot XRP Exchange-Traded Funds (ETFs) Source: SoSoValue

XRP Trend Strength Remains High

According to AMBCrypto's technical analysis, XRP's current position on the daily chart appears bearish, with indications that the downtrend may continue in the coming days. The primary reasons driving this bearish outlook include the current market sentiment and the loss of the $2.23 support level, along with the 50-day Exponential Moving Average (EMA).

XRP price action Source: TradingView

If XRP is unable to maintain its position above the 50-day EMA, a further decline of approximately 6.5% could occur, potentially dropping to the crucial support level of $1.90. Conversely, should the price hold above this support, a possible reversal might be on the horizon. Momentum indicators currently reflect a downside bias, with the Average Directional Index registering 28.49, indicating a strong trend leaning towards further declines rather than a reversal.

Despite the bearish signals, some analysts are considering a longer-term perspective. A well-known market analyst has observed that XRP maintains horizontal support near $2.02 on the weekly chart. As long as this support level persists, broader bullish scenarios could still be feasible.

Conclusion

In summary, XRP's recent decline has raised concerns about its price trajectory. However, the influx of institutional investments via ETFs and positive capital outflows suggest that some investors are positioning themselves for potential future gains. As traders navigate this complex market environment, watching key support and resistance levels will be critical.