XRP is struggling to regain higher price levels as continued selling pressure and broader market uncertainty continue to weigh on sentiment. Despite occasional attempts at recovery, momentum remains fragile, with traders reluctant to deploy capital against the backdrop of high volatility and cautious liquidity conditions. The asset has yet to reach a convincing higher high, reinforcing the perception that XRP is in a transition phase and not in a confirmed recovery trend.
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A recent CryptoQuant report provides additional context via exchange flow data. According to the analysis, Binance recorded a sharp spike in inflows from XRP exchanges during a previously highlighted period that preceded a strong rally. Large inflows typically reflect the movement of tokens onto exchanges, a dynamic often interpreted as potential selling pressure as assets become immediately available for liquidation. Such spikes can increase short-term supply and increase volatility.
However, the inflow does not always result in immediate distribution. In the case mentioned, the increase in foreign exchange deposits coincided with increasing volatility and ultimately preceded a significant increase in prices. This suggests that some inflow events may represent strategic positioning, liquidity preparation, or internal reallocation rather than outright selling. As XRP deals with the current uncertainty, monitoring the behavior of stock flows remains critical to assess whether renewed volatility could precede a directional breakout again.
Liquidity compression indicates increasing volatility risk
The report explains that liquidity dynamics provide important context for understanding XRP market structure, especially when evaluating volatility risk and potential price inflection points. USD liquidity measures the depth of capital supporting XRP trading pairs. During the previous rally phase, liquidity in the USD increased significantly, allowing price increases to be absorbed without excessive volatility. However, recently, liquidity in the USD has decreased, indicating that market depth is less than during the expansion period. Smaller depth generally increases sensitivity to order flow and can amplify price movements.
Liquidity measured in XRP terms reflects the availability of tokens on the sell side. Prior to the last major breakout, XRP liquidity dropped significantly, indicating reduced active supply on the exchanges. That contraction phase closely followed the start of the strong upward movement. Currently, XRP liquidity is lower again, which shows similarities to previous conditions before the expansion.
Historically, this combination of peaks in currency inflows and a contraction in liquidity has preceded the increase in volatility. Rising liquidity in USD tends to support ongoing trends, while declining liquidity often introduces fragility into the market structure.
Currently, currency inflows remain subdued, but both USD and XRP liquidity are declining. This points to a thinner environment in which price reactions could become sharper. These indicators provide structural context but need to be evaluated alongside derivatives positioning, financing trends and broader macro conditions before drawing directional conclusions.
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XRP remains under pressure as key support levels are continually tested
XRP remains under persistent technical pressure, with the weekly chart reflecting a clear corrective phase after the sharp rally that pushed the price above the $3.00 region in 2025. Since that peak, the price structure has shifted toward a sequence of lower highs and lower lows, a pattern typically associated with weakening momentum rather than consolidation. The recent move towards the $1.40 area highlights continued selling pressure and cautious positioning among market participants.
From a technical perspective, XRP is currently trading below the major moving averages that previously acted as dynamic support. These averages now act as overhead resistance, limiting upside attempts unless price can decisively regain them. The shorter-term average has rolled over more aggressively, while the longer-term trendline is still trending upward but lagging, indicating there is residual macro support in addition to deteriorating near-term momentum.
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Volume activity is muted compared to the impulsive rally phase, indicating reduced speculative participation. However, decreasing volume during corrections can also indicate seller exhaustion if it is accompanied by a stabilization of the price structure.
Immediate support appears to be centered around the recent lows around the $1.30-$1.40 zone, while resistance remains centered around the $1.80-$2.20 zone. Until XRP regains higher levels with strong participation, the broader trend remains vulnerable.
Featured image of ChatGPT, chart from TradingView.com