Bearish Divergence Threatens XRP Price Rally Despite Institutional Inflows

XRP faces critical technical headwinds as bearish divergence patterns emerge—just when institutional money finally shows up.

The Institutional Conundrum

Big money flows into XRP products can't seem to override weakening momentum signals. Classic case of smart money versus smarter charts.

Technical Breakdown

Price action keeps making higher highs while RSI prints lower lows. That divergence screams caution—no matter how much Wall Street tries to pump the narrative.

Market Reality Check

Institutional inflows provide fundamental support, but technicals often lead the dance. Right now, the charts are playing a different tune than the fund flows.

Because nothing says 'efficient markets' like institutions buying while the technicals flash sell—someone's gonna be holding the bag.

​​Institutions Bet on XRP as Long-Term Holders Pull Back From Selling

This month so far has been marked by an uptick in open interest in XRP futures contracts on the Chicago Mercantile Exchange (CME). Per Glassnode, this closed at a 10-day high of 384,500 XRP on Wednesday, confirming the steady surge in participation from larger market players.

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The rise in an asset’s CME open interest is significant because it reflects growing institutional exposure, a trend often associated with deeper liquidity and stronger price discovery. Unlike retail-driven activity, institutional flows can provide more sustained market support, reducing volatility. 

Therefore, this means XRP’s current rally is backed by long-term capital rather than short-term speculative interest.

Moreover, XRP’s on-chain Liveliness metrics have dipped, confirming the conviction of long-term holders. At press time, this metric, which tracks the movement of previously dormant tokens, sits at a 52-day low of 0.81, indicating a decline in distribution among XRP’s long-term holders (LTHs).

Liveliness measures the movement of long-held tokens by calculating the ratio of coin days destroyed to the total coin days accumulated. When this metric climbs, it means long-held coins are being moved or sold, indicating profit-taking by long-term holders.

On the other hand, when an asset’s Liveliness falls like this, its long-term holders are moving their tokens off exchanges and opting to hold.

XRP’s Bull Run Faces Resistance as Bearish Divergence Emerges

Interestingly, not all indicators align with the bullish narrative. Readings from the XRP/USD one-day show its Chaikin Money FLOW (CMF) below the zero line and trending downward. This forms a bearish divergence with XRP’s rising price, suggesting weakening capital inflows. 

The CMF indicator measures how money flows into and out of an asset. When it falls below zero during a price rally, it forms a bearish divergence with the price. This indicates that buy-side pressure in the market is weakening and may no longer be able to sustain the momentum.

This puts XRP at risk of losing strength and falling toward $2.69.

However, a return of retail accumulation, combined with the rising institutional interest and long-term holder resilience, could sustain a rally toward $3.11.