XRP climbed back toward $1.31 on Monday, recovering from weekend lows near $1.26 after a stretch of selling pressure and declining futures positions. The bounce, however, comes with signs that institutional interest may be cooling, raising questions about the durability of the rebound.
Short squeeze fuels the bounce
The recovery was partly driven by a short squeeze. XRP jumped from $1.26 to $1.29 within an hour on Sunday, with roughly $240,000 in short liquidations across major exchanges like Binance, Bybit, and OKX. These forced closures added buying pressure as traders who had bet on further declines scrambled to cover positions.
Yet such activity does not confirm that long-term investors are accumulating. Market analyst Vuori Trading highlighted the $1.30–$1.32 support zone as critical, noting that a break above the descending price channel could open a path toward $1.87. However, that support briefly failed during Sunday's dip, and the technical outlook remains conditional.
Liquidations may have eased selling pressure
Derivatives data offers a clearer picture of why the sell-off has stalled. Combined open interest on Binance and Bybit fell by 175 million XRP, or 26.5%, between September 23 and October 16. Over the same period, the cumulative volume delta for spot and perpetual futures deteriorated by roughly $1.99 billion, indicating that sellers dominated transactions during the downturn.
Falling prices alongside shrinking open interest often signal that leveraged bulls are being flushed out. Once those positions are closed, the market becomes less vulnerable to another cascade of forced selling. But reduced selling is not the same as new demand.
Analyst Petar Jovanović noted that XRP's short-term conditions were "stretched enough for a rebound attempt," with the relative strength index near 24, an oversold reading. Still, other momentum indicators remained bearish, suggesting this could be a relief rally rather than a trend reversal.
ETF outflows break a 13-week streak
The institutional picture adds a cautionary note. US spot XRP ETFs recorded approximately $1.84 million in net outflows for the week ended October 16, ending 13 consecutive weeks of inflows, according to SoSoValue data. While the withdrawals are small relative to the $1.47 billion in ETF assets, they interrupt a consistent source of support.
The negative volume-delta figures describe selling through October 16, but they cannot identify who bought during Monday's recovery. There is also disagreement among analysts about where attractive entry points lie. Cryptoinsightuk favored a potential purchase near $1.22 rather than assuming the $1.30 area would hold.
For bulls, reclaiming $1.33 and then challenging $1.39 with stronger spot buying would provide firmer evidence of renewed conviction. Until then, the rebound appears driven more by the absence of sellers than by fresh accumulation.
This article is for informational purposes only and does not constitute financial advice.
