As market sentiment across the crypto space turns increasingly cautious, XRP is showing signs of weakness that may lead to a further price correction in the short term. Several critical on-chain metrics and investor behaviors suggest that the bearish momentum is building, pointing to potential downside risks for XRP holders.
1. Traders Are Pulling Back: Over $222M in Outflows Signals Rising Pessimism
One of the clearest red flags comes from XRP’s Estimated Leverage Ratio (ELR) on Binance, which has been declining rapidly. According to data from CryptoQuant, the ELR has dropped to 0.36, marking the lowest closing level in the past four weeks.
![Estimated Leverage Ratio of XRP | Source: CryptoQuant]
The ELR measures the average leverage used by traders, calculated by dividing total open interest by the amount of XRP held in exchange reserves. A falling ELR suggests that traders are reducing their exposure to high-risk positions, likely due to fading confidence in XRP’s short-term price performance.
In other words, fewer traders are willing to bet aggressively on XRP’s recovery, which often precedes a deeper correction.
Meanwhile, on the spot market, data from Coinglass shows a net outflow of over $222 million from XRP holdings since July 29th. This significant capital withdrawal indicates that selling pressure continues to dominate, while buying activity remains too weak to absorb the available supply.
![XRP Spot Exchange Flow | Source: Coinglass]
If capital continues to flow out of the asset, it could extend the downward trend as increased supply meets insufficient demand—fueling a potential price drop.
2. Technical Levels Show XRP Could Slide Toward $2.71, But Recovery Isn’t Off the Table
From a technical standpoint, XRP is approaching a key support zone around $2.71. If the selling trend persists and this level fails to hold, the next potential target for bears could be $2.50—a critical level where further breakdowns may occur.
![XRP Price Chart | Source: TradingView]
However, the outlook isn’t entirely grim. Should demand return with enough strength to push XRP above the psychological resistance of $3.00, a bullish reversal could send the token toward $3.39, a level previously seen as a near-term target by bullish traders.
For now, investors should closely monitor capital flow trends, exchange activity, and leverage metrics to gauge the likelihood of either a breakdown or a potential rebound.
Conclusion
While XRP still holds long-term promise in the broader crypto ecosystem, the short-term landscape looks increasingly fragile. With leverage falling, capital flowing out, and sentiment deteriorating, the next few sessions could be pivotal.
Traders and investors should remain cautious and data-driven—paying close attention to technical support zones and on-chain signals that may hint at either capitulation or a surprise recovery.
Ready to start your cryptocurrency journey?
If you’re interested in exploring the world of crypto trading, here are some trusted platforms where you can create an account:
- Binance – The world’s largest cryptocurrency exchange by volume.
- Bybit – A top choice for derivatives trading with an intuitive interface.
- OKX – A comprehensive platform featuring spot, futures, DeFi, and a powerful Web3 wallet.
- KuCoin – Known for its vast selection of altcoins and user-friendly mobile app.
These platforms offer innovative features and a secure environment for trading and learning about cryptocurrencies. Join today and start exploring the opportunities in this exciting space!
Want to stay updated with the latest insights and discussions on cryptocurrency?
Join our crypto community for news, discussions, and market updates: CryptoBCC on Telegram.
For collaborations and inquiries: CryptoBCC.com@gmail.com
Disclaimer: Always do your own research (DYOR) and ensure you understand the risks before making any financial decisions.
