XRP ETF inflows exceed $756M as bullish divergence hints at trend reversal

Spot XRP exchange-traded funds (ETFs) continued to attract investors, recording their eleventh straight day of inflows, underscoring institutional demand. But is this enough to keep the XRP price above $2 and trigger a sustained recovery?

Key takeaways:

• Spot XRP ETFs have attracted over $756 million in inflows since their launch.

• RSI bullish divergence and a buy signal from the TD sequential emerge.

• XRP price must break above the $2.20-$2.50 range to clear the path to $3.

Strong XRP ETF inflows spark optimism

According to data from SoSoValue, US-based spot XRP ETFs added $89.65 million on Monday, bringing cumulative inflows to $756 million, suggesting sustained demand from institutions.

These ETFs have recorded inflows every day since their launch on Nov. 13, pushing total assets under management (AUM) to $723 million. 

Currently, four XRP ETFs are live, with Canary’s XRPC on Nasdaq leading with $350 million in cumulative net inflows, followed by Bitwise’s XRP ETF at $170 million.

Nearly 330 million XRP tokens have been absorbed over the last eleven days, outpacing Solana ETF flows and occurring against a backdrop of smaller Bitcoin ETF inflows.

Related: XRP price ‘looking very bullish’ after 25% weekly gain: How high can it go?

Meanwhile, global XRP exchange-traded products (ETPs) saw the largest inflows on record, drawing in $289 million last week, reflecting persistent demand from institutional investors.

James Butterfill, CoinShares’ head of research, attributed XRP’s surge to recent US exchange-traded fund (ETF) launches, such as Canary Capital’s XRP ETF, which debuted in mid-November.

Vanguard, a global investment management company with $11 trillion in assets under management, is also expected to enter the fray, allowing its over 50 million clients to trade crypto ETFs on its platform starting Tuesday, including XRP ETFs. 

XRP’s bullish divergence signals growing momentum

In line with perfect spot ETF inflows, XRP’s ability to rebound from current levels is reinforced by an emerging bullish divergence between the relative strength index (RSI) and the XRP price on the daily chart.

“​​$XRP is building a strong bullish divergence on the daily time frame, which has grown in strength during the slow grind down for over 55 days since the liquidation event,” said analyst ChartNerd in an X post on Monday, adding:

A bullish divergence occurs when the price registers lower lows while the RSI forms higher lows, often indicating waning bearish momentum and potential for a reversal. This prompts traders to buy more on the dips as investor interest increases and seller exhaustion sets in.

Meanwhile, the TD sequential indicator is flashing a buy signal on XRP’s weekly chart, as shown below.

Since mid-2021, every time this indicator suggested buying, the pair rallied between 37% and 174%. 

The TD Sequential is an oscillating trend-following chart overlay indicator used to determine short-term trend reversals based on changes in intraday highs and lows.

In this case, the indicator predicts that the XRP price could rebound from the current level, rising as much as 174%, to trade around $5.60.

However, the XRP price first faces stiff resistance between $2.20 and $2.50, which is supported by the 50-week simple moving average.

As Cointelegraph reported, if the XRP price turns sharply upward from the support line at $2 and breaks above the 20-day EMA around $2.18, the pair may rise to test the 50-week SMA and subsequently the psychological level at $3.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.