Ripple's XRP is showing speculative heat as capital flows into it exceeded $1.25 billion last week. According to Glassnode, XRP Hot Capital has risen from $0.92 billion to $2.17 billion, up 134.9%. Theoretically, that's a large capital influx, but looking at the broader picture, the outlook is not very optimistic.
Despite the influx of capital, XRP is still down 72% from Hot Capital's peak of $7.66 billion in December 2024. That gap tells a different story: traders are coming back but are doing so cautiously. Therefore, sellers may dominate in the current moment.
Short-term capital is speculative, not based on conviction
This latest influx of capital is speculative, with traders targeting XRP for a short-term recovery. In the past, similar inflows have led to price surges, such as at the end of 2024 when XRP briefly rose to $3.40. But this influx is still far from those euphoric highs. To match that upward momentum, XRP will need nearly $5 billion in speculative liquidity.
That lost capital reflects the entire market. Despite the inflow of capital, XRP has decreased by 2.65% on the daily chart and 1.62% over the week. Traders are not chasing prices yet. Additionally, according to exchange data, many are preparing for downside risks.
Exchange behavior shows that sellers are in control
Exchange behavior supports the bearish view. Wallets holding 100,000 to 1 million XRP are the most active sellers, transferring over 21.7 million tokens to exchanges. Next is the group of 10,000–100,000 XRP which transferred 900,000 tokens.
Therefore, most of the recent influx may come from traders wanting to short XRP rather than stack it. This aligns with the Taker Buy-Sell Ratio, which has been negative for the entire week, meaning more selling than buying.
The funding rate is negative as shorts dominate
If anything confirms this mood, it’s the data on funding rates. Aggregated across major exchanges, XRP's funding rate has turned negative again, meaning traders are paying a premium to maintain short positions. That indicates the market is bearish.
Even sentiment indicators agree. According to Santiment, XRP's weighted sentiment index has been negative for 6 out of 7 days and only turned green on April 28. Confidence in XRP's short-term bullish trend is very fragile.
CME Futures and RLUSD could change the trajectory, but not right now
Looking ahead, there are two things that could change the trajectory, but they are not here yet. First, the CME Group is set to launch XRP futures on May 19, pending regulatory approval. If approved, these contracts will provide institutions with access to XRP through cash-settled instruments. This will improve liquidity and price stability over time, but it won't affect the current order book.
On Monday, Ripple's upcoming stablecoin RLUSD is expected to connect traditional finance and on-chain finance. Pegged 1:1 to the US dollar and backed by cash and cash equivalents, it could create new demand pathways for XRP as it operates. But once again, this is a game for the future, not a current catalyst.
Conclusion: Traders Eye has two price levels: $2.16 and $2.30
Currently, XRP is caught between bearish outflows and speculative inflows. If selling pressure continues and market sentiment remains pessimistic, XRP could drop to $2.16. But if inflows continue and short selling is squeezed, moving down to $2.30 is not impossible.
But any recovery will need more than just capital. The return of confidence, especially from long-term holders and institutions, will be necessary to steer away from the current bearish trend.
