XRP Price Under Pressure: ETF Outflows, Holder Losses, and a Possible Rebound

XRP continues to struggle as selling pressure keeps the token locked in a month-long downtrend heading into February. A recent sharp pullback has reinforced bearish sentiment, weighing on both spot markets and related investment products.

The weakness has also carried over into XRP exchange-traded funds (ETFs), where flow volatility highlights lingering investor caution. Nevertheless, signs of stabilization are appearing beneath the surface, which would determine whether XRP price will further downside or recover.

XRP ETFs Are Yet To Do Better

Spot XRP ETFs posted net outflows of $404,690 on Monday despite closing the previous week on a positive note, recording $16.79 million on Friday. The improvement in ETF flows was reversed as this week began, signaling a comeback of selling pressure.

The shift shows that the macro bearishness hasn’t disappeared completely yet, given that on Thursday, January 29, XRP ETFs recorded $92.92 million in outflows, the largest since launch. That session coincided with a broader market crash and a 9% drop in XRP price.

Stabilizing flows offer much-needed support for restoring market confidence, a key requirement for any XRP price recovery. However, broader sentiment remains fragile, as doubts about a sustained rebound continue to weigh on investor outlook.

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Saturating Losses Could Prevent Sell-Off

On-chain data shows short-term holders facing heavy unrealized losses. The STH Net Unrealized Profit and Loss metric currently sits at -0.38. This marks the deepest loss level since July 2022 and a three and a half year high. This reflects widespread capitulation among recent XRP buyers.

Despite appearing negative, rising STH losses may reduce immediate selling risk. Short-term holders are historically reactive, often selling quickly during profit periods. With losses deepening, selling incentives weaken.

This dynamic can temporarily suppress supply, giving XRP price space to stabilize and attempt a recovery if demand improves.

XRP Price Bounceback Likely

XRP price is trading near $1.62 at the time of writing, sitting below the $1.70 resistance. The altcoin has remained in a steady downtrend since early January. Last week’s 16% decline reinforced bearish structure, keeping XRP below key moving averages and limiting upside momentum.

However, these two factors suggest a short-term rebound remains possible. The first is that the short-term holder losses appear saturated, lowering distribution risk. The second is that momentum indicators show XRP is oversold, increasing the probability of a technical bounce toward $1.79.

The Money Flow Index currently sits near the oversold threshold. A decisive dip into oversold territory often precedes reversals. In a similar setup previously, XRP surged 14% within 48 hours. If broader market conditions remain supportive, a comparable reaction could unfold during this recovery attempt.

However, downside risk persists if bullish momentum fails to materialize. A rejection below $1.70 may expose XRP to renewed selling pressure. Under this scenario, the price could fall to $1.54 or even $1.47. Losing these support levels would invalidate the bullish thesis and extend the ongoing decline.