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XRP Investors Take Note: $11M Inflows May Fall Short of Driving Significant Price Movement

XRP Investors Take Note: $11M Inflows May Fall Short of Driving Significant Price Movement

Author:
Ambcrypto
Published:
2025-04-19 06:00:25
12
3

Despite recent capital inflows totaling $11 million into XRP, market indicators suggest this may not be sufficient to catalyze a substantial price rally for the altcoin. Current on-chain metrics and trading volume patterns reveal persistent selling pressure that could offset these inflows. Technical analysis shows key resistance levels remain untested, while exchange reserves continue to climb - typically a bearish signal. The Relative Strength Index (RSI) hovering near neutral territory indicates neither strong buying nor selling momentum. Furthermore, derivatives data displays muted open interest growth, suggesting limited institutional participation. Market participants should exercise caution as these factors, combined with broader crypto market conditions, may constrain XRP’s upside potential in the near term.

Bullish pattern and liquidity inflows

At press time, XRP’s price was forming an inverted head and shoulders pattern. Such a pattern typically precedes a major rally, with the price trending higher soon after. 

This pattern, now emerging on the altcoin’s 4-hour timeframe, could cause the asset to rally up to $2.5 – A level last reached on 24 March.

Source: TradingView

Options traders are contributing to the growing bullish sentiment, as volume surged by 256% in the last 24 hours. In fact, Option Open Interest spiked to $220,860 as more traders opened new positions, likely to buy contracts.

Spot market traders have also been mirroring this bullish sentiment. During this period, these traders purchased $11 million worth of XRP from exchanges and moved the assets into private wallets.

Source: Coinglass

When a notable acquisition like this is followed by transfers to private wallets, it implies conviction among investors. If this pattern continues, it could lead to a supply squeeze in the market.

However, while the market position may be clearly bullish on the charts and among options and spot traders, the setup may be dampened by low on-chain activity.

Drop in on-chain activity could slow down XRP

Despite the presence of bulls in the market, a drop in key on-chain metrics, specifically executed transaction count and active account, might slow down the rally. Especially since they hinted at a fall in the use of XRP chain and the token.

The executed transaction count plunged from 1.56 million to 660,000 in the last 24 hours, implying fewer transactions involving XRP. Active accounts, particularly senders, have also declined sharply – From a high of 20,700 to 8,500. This finding indicated fewer traders on-chain.

Source: XRPScan

If these metrics keep falling without a significant hike in activity, XRP’s move to the upside will be at risk.

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