The XRP market has just provided a textbook example of the cryptocurrency sector’s extreme volatility and rapid sentiment shifts. A dramatic sell-off on Thursday was followed by an equally swift recovery on Friday, driven by a confluence of factors including major investor accumulation, surging network metrics, and persistent institutional interest. This sequence underscores the asset’s current sensitivity to leveraged trading and broader market mechanics.
ETF Flows and Network Activity Provide a Foundation
Amidst the price turbulence, a notable constant has been the steady demand for XRP through exchange-traded funds. Data from SoSoValue, cited by Sherwood News, indicates that spot XRP ETFs attracted inflows of $5.9 million on Thursday alone. This brought the weekly total to nearly $24 million, with cumulative net inflows since launch surpassing $1.37 billion (as of early February).
This institutional backdrop coincided with a significant spike in on-chain engagement. According to Glassnode, the number of new active addresses on the XRP Ledger surged by 51.5% to reach 5,182—marking the highest level in approximately two and a half months. This influx of fresh or returning participants added fundamental support to the price recovery.
The Liquidation Cascade and Subsequent Reversal
The week’s volatility began with a sharp downturn. CoinDesk reported that this decline triggered the liquidation of roughly $46 million worth of XRP derivatives positions. The vast majority of these, approximately $43 million, were long contracts. Market analysts viewed this forced unwinding of over-leveraged bets as a necessary cleansing that ultimately helped establish a price floor.
The subsequent rebound, therefore, was characterized less as a reaction to specific news and more as a classic market technical. Once the selling pressure from mass liquidations subsided, even modest buying was enough to catalyze a sharp upward move. Supporting this view was data from Binance, which revealed a stark contrast in positioning: while the long/short ratio for regular accounts stood at 2.13 (indicating a retail bias toward bullish bets), the ratio for top traders was 0.73, showing that larger, potentially more sophisticated addresses had been positioned for a decline.
Major Accumulation and Ripple’s Institutional Vision
A critical driver of the Friday recovery was aggressive buying by large-scale holders. Analytics firm Santiment, as reported by BeInCrypto, observed that wallets holding between 100 million and 1 billion XRP accumulated more than 230 million tokens within a 48-hour window. Such substantial purchases can act as a sponge, absorbing available sell-side liquidity and reducing circulating supply—a powerful stabilizing force during periods of market stress.
Should investors sell immediately? Or is it worth buying XRP?
This activity occurred in a week where Ripple reiterated its focus on institutional adoption for the XRP Ledger. In a blog post highlighted by Sherwood News, the company positioned XRP as a core building block for enterprise use cases, including stablecoin settlements, tokenized collateral, and credit markets. The roadmap mentions a native lending protocol, confidential transfers using zero-knowledge proofs, permissioned markets for regulated entities, and enhanced programmability for escrow services.
Relatedly, Ripple’s RLUSD stablecoin has reportedly reached a market capitalization exceeding $1.3 billion, according to 24/7 Wall St.
Key Data Points:
– >230 million XRP accumulated by large wallets in 48 hours (Santiment)
– +51.5% jump in new transacting addresses to 5,182 (Glassnode)
– ~$46 million in XRP derivatives liquidated, predominantly longs (CoinDesk)
Despite the rebound, XRP’s technical position remains challenged. The asset closed Friday at $1.22, simultaneously setting a new 52-week low. Its Relative Strength Index (RSI) reading of 28.8 places it firmly in oversold territory.
In summary, the recovery appears to be a function of coordinated whale buying, revitalized network participation, and unwavering ETF demand. However, the violent price swings serve as a clear reminder that in the short term, leverage and sentiment continue to dictate the market’s rhythm.
Ad
XRP Stock: Buy or Sell?! New XRP Analysis from February 7 delivers the answer:
The latest XRP figures speak for themselves: Urgent action needed for XRP investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from February 7.
XRP: Buy or sell? Read more here...