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Recent trends in Ripple’s XRP market signal heightened volatility as capital inflows surge amidst persistent bearish sentiment.
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Despite a 134% increase in HOT capital over a week, XRP struggles to regain former market highs, indicating ongoing investor uncertainty.
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As per insights from COINOTAG, analysts warn that the current bearish sentiment may overshadow the short-term capital influx.
XRP experiences a dramatic surge in short-term capital inflows yet remains under bearish pressure, raising questions about future price movement.
Hot Capital spikes, but still lags past highs
According to Glassnode, XRP Hot capital surged from $0.92 billion to $2.17 billion in just one week. This represents a $1.25 billion increase, reflecting a surge of +134.9% within that time frame.
This growth indicates a resurgence of speculative interest, with traders entering the market to capitalize on potential price rebounds. However, it’s important to note that the current levels are still approximately 72% lower than the peak of $7.66 billion recorded in December 2024.
Source: Glassnode
This discrepancy suggests that although interest in XRP is rising, market enthusiasm has not yet fully returned, indicating that there might be substantial room for future growth. To match the speculative excitement witnessed in late 2024, XRP would require an influx of nearly $5 billion in additional capital.
Historically, a surge in demand has often resulted in higher prices; when the metric last peaked, XRP reached $3.4 by January 2024. Thus, the increase in capital inflow could potentially spark another breakout in prices.
Price performance doesn’t reflect the capital surge
While XRP’s Hot Capital shows signs of recovery, its price has struggled on multiple metrics. In the last week, XRP declined by 2.65% daily and 1.62% weekly, reflecting the prevailing bearish market sentiment.
This downturn points to a lack of genuine demand in the XRP market, as many key buyers have withdrawn their participation. As a result, the Taker Buy-Sell Ratio has consistently remained negative, illustrating sellers’ dominance over the market.
Source: CryptoQuant
Particularly, sellers holding between 100k to 1 million XRP tokens currently dominate the market, accounting for a significant portion of exchange inflow, followed by those holding 10k-100k tokens.
This high exchange inflow from this cohort indicates that retail investors are actively engaged in selling, reinforcing the ongoing bearish trend.
Source: CryptoQuant
Shorts take control as sentiment worsens
Market dynamics have shifted with a considerable number of traders shorting XRP aggressively, leading to a total Funding Rate Aggregated by Exchange that has turned negative once more. This negative funding indicates that short positions are overwhelming market sentiment.
Source: Santiment
Recent data reveals a troubling trend for XRP; the Weighted Sentiment has recorded negative values most days over the past week, reflecting a lack of confidence among traders regarding the altcoin’s future direction. Only one day, April 28th, showed a brief spike in positivity.
Source: Santiment
Ultimately, even though Hot Capital has recoiled, other market metrics have yet to reflect this trend. Should this bearish sentiment persist, XRP risks falling towards $2.16. However, should speculative capital continue its upward trajectory, a rebound towards $2.3 could be plausible, provided market confidence is regained.
Conclusion
To summarize, while the recent surge in XRP’s Hot Capital reflects renewed interest from speculative traders, the underlying market dynamics and negative sentiment paint a complex picture. Traders should remain vigilant as further developments unfold, with a critical eye on market trends and capital flows.
