The XRP price has dropped 60% from its July 2025 peak of $3.65, briefly touching $1.11 before stabilizing near $1.50. XRP’s (CRYPTO: XRP) crash has been severe, but three on-chain signals suggest the selling is running out of steam.
Exchange balances have dropped to multi-year lows, ETF inflows have held steady through the decline, and funding rates have hit extremes that historically mark turning points. None of this guarantees the XRP price has bottomed, but the data points to accumulation rather than capitulation.
XRP exchange balances tracked by Glassnode have dropped sharply, falling from 3.76 billion tokens in October 2025 to around 1.7 billion by February 2026. That represents roughly 55% reduction in four months. Coins are moving off exchanges at scale, and when liquid supply shrinks this much, there’s less inventory available for panic selling.
This pattern has preceded major reversals before. Similar outflows in late 2024 tightened liquidity just before XRP staged a sharp rally into early 2025. Current wallet data shows large holders increasing exposure, with whales accumulating over 3 billion XRP since October, according to Santiment.
A Glassnode researcher recently clarified that the platform tracks only about 10 exchanges and only wallets it has verified. XRPScan data suggests exchanges may actually hold 14 to 16 billion XRP across broader platforms. That doesn’t invalidate the trend, but it means the “supply shock” narrative may be overstated.
Still, a drop this size on tracked exchanges suggests long-term holders are accumulating — an XRP bottom formation signal worth watching.
While the XRP price plunged nearly 60% from its highs and briefly touched $1.11 in early February, ETF investors kept buying. Since their November 2025 launch, XRP ETFs have attracted more than $1.37 billion in cumulative inflows.
The products posted over 35 consecutive trading days of positive flows before the first outflow of $40.8 million on January 7. Even during the February 2 to 9 selloff, funds added roughly $51 million, showing steady demand while spot prices unraveled.
XRP’s resilience stands out as Bitcoin ETFs saw over $1 billion in outflows, and Ethereum products turned net negative. XRP remains the only major crypto ETF group sustaining consistent inflows through the downturn. ETF wallets have absorbed approximately 750 million to 788 million XRP from exchanges, aligning with the sharp drop in available supply.
This doesn’t guarantee that the XRP bottom is confirmed as inflows can reverse if macro conditions worsen. But sustained buying during a 60% crash suggests conviction that institutions are accumulating, not fleeing.
Binance funding rates recently fell to -0.028%, the lowest level since April 2025. When funding goes this negative, it means the selling side is crowded, and almost everyone is already short.
Historically, crowded shorts have marked turning points. Similar funding conditions in April 2025 preceded a rapid rebound from $1.60 to $3.65 by July, marking an 82% rally as shorts were squeezed out.
Comparable setups in late 2024 triggered sharp upside moves as traders rushed to close positions. Open interest, the total value of active futures contracts, currently sits near $2.1 billion to $2.5 billion — down roughly 40% from the December highs — meaning many overleveraged traders have already been flushed out.
Negative funding can persist in falling markets, so this alone doesn’t confirm the bottom. But when almost everyone is already short, there’s limited fresh selling left. If momentum shifts even slightly, shorts rushing to exit could accelerate an XRP price recovery faster than expected.
Strong on-chain signals improve probabilities of an XRP price recovery, but they don’t confirm timing or eliminate downside risk in volatile markets.
Calling an XRP bottom requires more than encouraging signals. Price, on-chain activity, macro stability, and execution must align. Without confirmation on multiple fronts, short rallies risk fading into another lower high.
The first thing to watch is price. The XRP price needs to reclaim $1.60 and hold it for at least a week. The $1.60 level marked prior breakdowns and now acts as resistance — a higher low above that zone would strengthen the reversal case. A break above the 20-day moving average near $1.45, backed by rising daily trading volume, would show real demand rather than short covering.
On-chain data needs to confirm the shift as well. ETF inflows should expand beyond $100 million per week and persist. Exchange balances need to stay below 1.7 billion XRP on tracked platforms, or fall closer to 1.5 billion. Sustained whale accumulation alongside shrinking exchange supply would signal long-term conviction is building.
Macro conditions also matter. Bitcoin holding above $70,000 for several sessions would ease pressure across altcoins. Sentiment would improve if the Bitcoin Fear and Greed climbs out of extreme fear above 25. A softer tone from the Fed would also help as XRP rarely bottoms while the broader market is falling.
Even when everything lines up, false starts happen. The signals can confirm a bottom and the XRP price can still fake out before reversing.
The XRP price has taken significant damage, but the data suggests the selling may be running out of steam. Exchange supply is tightening, ETF demand remains steady, and derivatives positioning is stretched to bearish extremes. These conditions have historically marked the end of selloffs.
Confirmation still depends on the XRP price holding $1.60 and Bitcoin stabilizing above $70,000. Based on current evidence, an XRP bottom appears to be forming, though not fully confirmed. Until price confirms, it’s a setup worth watching, not a guarantee.
