With Froth Drained from Derivatives Market, Has XRP Finally Confirmed a True Bottom?

▲ Ripple (XRP)

XRP (Ripple) has desperately defended the $1.30 support level, firing a powerful signal of rebound alongside the exchange-traded fund (ETF) market. As excess froth in the derivatives market clears and spot buying demand surges, analysts say a true bottom may be approaching to end the prolonged downtrend.

According to investment media outlet TradingNews on February 26 (local time), XRP spot prices are stabilizing and recovering within the $1.30 to $1.40 range. In tandem, the XRP exchange-traded fund XRPI surged 8.28% intraday to $8.37, while Rex-Osprey’s XRPR also jumped 7.44% to $11.98, staging a parallel rally.

The core driver of this rebound lies in excessive leverage liquidations and a shift in ownership. Open interest in futures, which stood at $10.94 billion last July, has plunged about 80% to around $2.24 billion, indicating a significant exit of speculative forces. Meanwhile, cumulative net inflows into XRP spot ETFs have reached $1.23 billion, as long-term investors quietly absorb $1.93 billion worth of realized losses released by weaker hands, strengthening the asset’s fundamentals.

Retail traders are also aggressively buying the dip. On February 23 and 24, spot buying volume surged 212%, overwhelmingly surpassing selling pressure. The daily Moving Average Convergence Divergence (MACD) indicator crossed above its signal line, flashing a positive signal, while the Relative Strength Index (RSI) moved out of oversold territory, hinting at a momentum shift.

However, caution remains as the long-term downtrend line and major moving averages continue to weigh on prices. The immediate priority is to break through the $1.40 to $1.47 resistance zone and secure a closing price above it. A successful breakout could trigger a short squeeze—buying driven by the liquidation or covering of short positions—potentially propelling prices sharply toward the $1.60 to $1.80 range.

Experts view the current range as an attractive buying opportunity with a clear invalidation level. If the $1.30 support remains solid, further upside may be possible on the back of a healthier, deleveraged market structure and continued ETF inflows. However, a breakdown below $1.25 would require strict risk management in anticipation of an extended downtrend.

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