Key Takeaways
XRP (XRP) on the Ripple ledger is caught between a classic bearish chart pattern that projects an 18 percent price drop and a more than 300 percent surge in exchange outflows that signals strong underlying buying pressure.
"Net exchange outflows signal accumulation off-exchange," a report from analyst Harsh Notariya noted, referencing the on-chain trend. Glassnode data shows the net position change on exchanges dropped from -7,144,942 XRP on May 15 to -29,372,431 by May 24, a more than 300 percent increase in coins moving into private wallets.
The bearish head and shoulders pattern, formed between early March and mid-May, has a technical neckline at approximately $1.18. A sustained break below this level would confirm the pattern and target a drop of roughly 18 percent. XRP currently trades at $1.35, with traders watching support levels at $1.28 and $1.21.
The divergence has created a stalemate, with the technical pattern's validity being directly challenged by the on-chain accumulation trend. The resolution depends on whether the persistent buying pressure can absorb selling that may arise if the price breaks key technical levels. A move below the $1.18 neckline would confirm the bearish scenario, while holding these levels suggests accumulators are absorbing the supply.
The case against a price breakdown is supported by more than just exchange flows. Derivatives data from Santiment shows that open interest in XRP futures has fallen from $1 billion to $914.19 million since May 15. During the same period, total funding rates paid by traders to hold long positions dropped 62 percent from 0.008 percent to 0.003 percent.
This decline in both open interest and leverage reduces the risk of cascading long liquidations, a common event that can accelerate price drops during a sell-off. With less leverage in the system, the market is less susceptible to a violent downside move, lending weight to the idea that XRP could remain range-bound despite the bearish chart. The situation is compounded by thinning liquidity on exchanges like Binance, which, according to recent analysis, has dropped to its lowest level since 2020, potentially amplifying volatility in either direction.
This article is for informational purposes only and does not constitute investment advice.
