XRP appears to have carved out a meaningful bottom near $1.12 after a prolonged decline, with several technical, onchain and institutional indicators pointing toward a potential shift in market structure. While the token is still trading well below its all-time high, recent data suggests selling pressure may be fading and buyers are slowly regaining control.

After touching a 15 month low of $1.12 on Feb. 6, XRP rebounded nearly 50 percent to a recent high of $1.67. At the time of writing, the price is hovering around $1.43. Although that level is still more than 60 percent below the multi-year peak of $3.66, multiple signals indicate that the worst of the drawdown could be over.

Exchange balances drop to multi-year lows

One of the clearest bullish signals is the steady decline in XRP held on centralized exchanges. According to onchain data from Glassnode, the total XRP balance on exchanges has fallen to around 12.9 billion tokens, a level last seen in May 2021.

When exchange balances decline, it often reflects holders moving assets into self-custody rather than keeping them ready to sell. This behavior typically reduces immediate selling pressure and can support price recovery during periods of renewed demand.

Supporting this trend, data from CryptoQuant shows that XRP reserves on Binance have dropped sharply to about 2.57 billion tokens. Both the 50 day and 100 day simple moving averages of reserves continue to slope downward, indicating a sustained outflow.

A CryptoQuant contributor noted that reserves are falling even as price remains close to recent lows, a structure that can increase the odds of a short squeeze if buying pressure accelerates.

Funding rates point to capitulation

Derivatives data adds another layer to the bottoming narrative. XRP perpetual futures funding rates on Binance fell to negative 0.028 percent when price hit $1.12, marking the lowest level since April 2025.

Negative funding rates mean short sellers are paying longs, a sign that bearish positions have become crowded. Historically, such extremes often coincide with local bottoms, as markets become oversold and vulnerable to sharp rebounds.

A similar setup in April 2025 preceded a rally of roughly 65 percent, with XRP climbing from $1.60 to $2.65 as shorts were forced to cover. Comparable conditions in late 2024 also led to sudden upside moves.

At the same time, futures open interest has declined sharply. Data from CoinGlass shows XRP open interest has dropped to about $2.53 billion, down more than 55 percent from the early January peak of $4.55 billion. This suggests leverage traders are stepping back rather than pressing bearish bets, often a sign that downside momentum is weakening.

Spot market demand begins to recover

Spot market activity is also showing early signs of improvement. The 90 day spot taker cumulative volume delta, which tracks the balance between aggressive buyers and sellers, recently flipped positive after weeks of neutrality.

A positive CVD indicates that market buy orders are outweighing sell orders, suggesting buyers are becoming more active at current price levels. If this trend holds, it could lay the groundwork for another upward leg, similar to patterns seen in past XRP recoveries.

Until recently, the neutral CVD reflected hesitation across the market. The shift toward positive territory signals that sentiment may be turning, even if cautiously.

ETF inflows highlight institutional confidence

Perhaps the strongest signal of longer-term confidence comes from institutional flows. US-based spot XRP exchange-traded funds have continued to attract capital despite the recent price correction.

Since their launch in November 2025, spot XRP ETFs have recorded inflows on 53 out of 59 trading days. According to data from SoSoValue, these products added $4.5 million in inflows on a recent Friday, pushing cumulative inflows to $1.23 billion. Total assets under management now exceed $1.01 billion.

This stands out against the broader market backdrop. While global crypto investment products posted a fourth consecutive week of outflows totaling $173 million, XRP-linked exchange traded products moved in the opposite direction. XRP ETPs led the market with $33.4 million in inflows during the week ending Feb. 13.

Such resilience suggests that institutional investors are viewing recent price weakness as an opportunity rather than a warning sign.

Are bulls ready to step in

Taken together, declining exchange balances, extreme negative funding rates, improving spot demand and steady ETF inflows all point toward a potential structural bottom around $1.12. While no single metric guarantees a sustained rally, the alignment of these signals strengthens the case for a trend reversal.

XRP still faces overhead resistance and broader market conditions remain a key factor. However, if buyer momentum continues to build and leverage remains subdued, the recent low could mark an important turning point for the asset.