- XRP has recovered from its late-June lows as trading volume surged 62% and Binance reserves continued to decline.
- A break above the $1.20 resistance level could strengthen the recovery, although weaker ETF inflows show institutional demand remains cautious.
XRP is showing fresh signs of recovery after rebounding from its late-June lows. A sharp increase in trading activity, falling exchange reserves, and improving technical indicators have strengthened the bullish case, although weakening ETF inflows suggest institutional investors remain cautious.
The next major test for XRP is the $1.20 resistance level. A successful breakout could pave the way for further gains, while rejection may slow the recovery.
XRP Reclaims Key Support After Late-June Selloff
XRP found strong support between $1.00 and $1.04 after a prolonged decline from above $1.55 earlier this year. Buyers stepped in around the $1.03 level, helping the price recover by roughly 8% and move back above $1.15.
Reclaiming $1.15 is considered an important technical development because the level previously acted as support before June’s decline. Holding above it could strengthen buyer confidence in the current recovery.
Some market analysts also pointed to the recent move as a successful third retest of support, suggesting XRP may be building a stronger foundation before attempting another move higher.
Trading Volume Signals Strong Market Participation
One of the biggest drivers behind XRP’s recovery has been the return of trading activity.
Trading volume climbed 62% within 24 hours, reaching approximately $1.8 billion. Higher volume often indicates stronger participation from buyers and sellers, making price movements more reliable than rallies supported by low trading activity.
Retail interest has also increased. On South Korea’s Upbit exchange, XRP trading volume recently exceeded Bitcoin’s, highlighting growing interest from one of the cryptocurrency market’s most active regions.
Shrinking Binance Reserves Point to Lower Selling Pressure
On-chain data also paints a positive picture for XRP. Binance’s XRP reserves have fallen by about 20% since November 2024, declining from roughly 3.27 billion XRP to around 2.6 billion. The exchange’s reserves also dropped from approximately 2.8 billion XRP in May to 2.6 billion by early July.
At the same time, the XRP Binance Scarcity Index climbed to 0.77, marking its highest level in more than two years.
Falling exchange reserves often suggest that investors are moving XRP into private wallets rather than preparing to sell. A lower available supply could support prices if demand continues to increase.
Institutional Demand Slows Despite Recovery
While on-chain signals have improved, institutional demand has weakened. Net inflows into XRP spot exchange-traded funds declined from $132 million in May to $59 million in June, representing a 55% month-over-month drop.
The decline suggests institutional investors became more cautious as XRP approached its recent lows. As a result, the ongoing recovery has been supported mainly by retail traders, technical buying, and derivatives market activity rather than large institutional inflows.
Short Squeeze Helped Fuel XRP’s Rebound
Part of XRP’s recent recovery was driven by liquidations in the futures market.
Funding rates turned sharply negative between June 26 and June 28, showing that many traders were betting on further price declines. As XRP began recovering, many of those short positions were forced to close, adding buying pressure and accelerating the rally toward $1.13.
Funding rates have since returned to slightly positive levels, suggesting the market has become more balanced following the short squeeze.
Can XRP Break Above $1.20?
The next major test for XRP is the $1.20 resistance level. A successful break above this price could open the path toward the $1.35 to $1.40 range. If the recovery continues, XRP could later target the 200-day Exponential Moving Average near $1.50.
RSI is currently around 55, suggesting XRP still has room for further gains before reaching overbought conditions. However, the recovery could weaken if sellers regain control. A drop below the $1.00 support level would put the bullish outlook at risk.
XRP’s recovery is being supported by rising trading volume, shrinking exchange reserves, and improving technical conditions. These signals suggest buying interest is returning after weeks of weakness.
Even so, declining ETF inflows show institutional investors have yet to fully embrace the recovery. Whether XRP can break above $1.20 will likely determine if the current rally develops into a stronger uptrend or loses strength after its recent rebound.
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