XRP Plunges Into Oversold Territory as Net Flows Flip Red—Bargain Hunt or Dead Cat Bounce?

XRP’s technicals scream oversold as capital flees—the Ripple token bled $12M in net outflows last week. Market sharks smell blood, but is this a buying opportunity or the start of a deeper correction?

Key levels to watch: The 200-day moving average at $0.48 held twice this month. Break that, and we’re revisiting Q1 lows. Meanwhile, perpetual funding rates just turned negative—usually a contrarian buy signal (or a warning that leverage traders are bailing).

Funny how ’institutional adoption’ narratives evaporate when the Fed threatens rate hikes. Either way, XRP’s 65% drop from its 2025 high means someone’s either getting a steal... or catching a falling knife.

XRP Netflows Remain Negative

A data researcher who goes by Dom on X shared an update on the XRP outflows, showing that they have remained negative for a while. In the post, Dom explains that XRP has been in oversold territory for the 7-day period, despite the rise in the altcoin’s price. The screenshot attached showed that over 88 million XRP tokens were sold off, which amounted to $210.9 million.

Data from the Coinglass website corroborates this as XRP net flows have remained negative for the last seven days at the time of this writing. So far, May 9 has been the worst in terms of sell-offs with net flows dropping to -$96.33 million in one day. The subsequent days have seen an average of -$20 million in net flows.

However, this was no cause for alarm. If anything, Dom explained that this could be bullish for the XRP price. One reason for this is that prices are going up while sell-offs are dominating, which shows that retail is not behind it. He explains that whales and market makers are likely absorbing the coins being dumped on the market, thus leading to the simultaneous increase in price.

Dom explains that this is a “bullish imbalance from an order FLOW microstructure lens,” meaning that it could actually end up being good for the XRP price. A continuation of this trend is expected to push the price higher, especially as sellers run out of tokens to sell.

Open Interest Shows Investors Are In

While the net flows continue to be negative, the XRP open interest tells a different story, according to Coinglass. It has been climbing in the month of May, following the price increase during this time. At the start of the month, the open interest was sitting $3.72 billion, but has since grown to peak at $5.53 billion on May 14.

This rise in the open interest shows that investors are actively placing bets on the XRP price. As the interest continues to rise, the price could jump in response to the new liquidity flowing in. This could set the price on a quick path to $3.