XRP Holds $1.40 Support Amid ETF Inflows and Derivatives Market Weakness

▲ XRP (XRP)/AI-generated image ©

XRP (XRP, Ripple) is keeping hopes of a rebound alive as it defends the key $1.40 support level, supported by inflows into spot ETFs from institutional investors. However, with derivatives market indicators reflecting retail investor sentiment showing clear weakness, caution is warranted before confirming a full-fledged trend reversal.

According to investment media outlet FXStreet on February 20 (local time), XRP was trading above the $1.40 support level during Friday’s session, eyeing a potential breakout toward its weekly opening price of $1.48. This short-term bullish outlook aligns with the modest intraday rebound seen in major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).

The most notable positive signal is institutional buying. As of Thursday, XRP spot ETFs recorded $4 million in inflows, sharply contrasting with the $166 million and $130 million in outflows from Ethereum and Bitcoin spot ETFs, respectively. Cumulative inflows into XRP spot ETFs have reached $1.23 billion, with total assets under management surpassing $1 billion. However, this remains below the $1.65 billion in net assets recorded in early January, indicating that overall investor sentiment remains somewhat unstable.

In contrast to the relative resilience of the spot market, the derivatives market presents a heavier tone. Open interest in XRP futures fell from $2.45 billion on Thursday to $2.32 billion on Friday. This metric, which reflects retail investor participation, reached a yearly high of $4.55 billion on January 6 but remains well below the all-time high of $10.94 billion recorded in July. The continued decline in open interest suggests a lack of strong market conviction in sustaining a bullish trend.

From a technical perspective, XRP is holding above the $1.40 support level, but overhead resistance remains formidable. The 50-day exponential moving average at $1.69, the 100-day at $1.90, and the 200-day at $2.12 are all trending downward, capping upward momentum. Additionally, the daily chart’s Supertrend indicator, which measures market volatility, is limiting gains around $1.72. Until XRP breaks above this level and the indicator turns green with a bullish signal, bearish pressure may persist. If the $1.40 support level breaks on a closing basis, losses could accelerate toward the October 10 low of $1.25 and the February 6 low of $1.12.

Nevertheless, the daily Moving Average Convergence Divergence (MACD) remains above its signal line, with expanding green histogram bars indicating the possibility of consolidation before a rebound toward the weekly opening price of $1.48. Traders are closely watching the key pivot zone around $1.67, Sunday’s high, and $1.69, where the 50-day exponential moving average is located. A successful reclaim of this range could pave the way for a confirmed shift into a broader bullish trend.

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