XRP holds $1 support: Is the leverage reset sufficient for a trend reversal?

Executive summary

XRP has demonstrated resilience by defending the $1.00 psychological support level, even as broader market conditions remain pressured. According to data reported by CoinDesk, XRP daily active addresses increased from 23,000 on June 14 to 39,500 by June 27, signaling a notable uptick in network utilization. This fundamental improvement coincides with a significant deleveraging event; open interest on major exchanges has plummeted from a peak of 1.3 billion to below 150 million, effectively removing the speculative froth that contributed to previous volatility.

Simultaneously, institutional appetite appears decoupled from broader market outflows. While Bitcoin and Ether ETFs have faced sustained selling pressure, XRP spot ETFs have recorded eight consecutive weeks of inflows, totaling $144.7 million. Despite these positive indicators, the asset remains trapped in a range, trading at $1.05 with price action failing to reclaim major moving averages. The immediate implication is a market in a state of transition: the 'weak hands' have been flushed, but institutional demand has yet to provide the necessary volume to force a breakout above $1.10.

Why it matters

The current market structure for XRP suggests a transition from a speculative-driven regime to one defined by institutional accumulation and organic usage. The reduction in open interest is a critical development for market health; it lowers the probability of cascading liquidations, which historically exacerbate downside volatility. By clearing out leveraged long positions, the market has established a cleaner foundation for potential upside, provided that spot demand continues to outpace selling pressure.

However, the divergence between on-chain metrics and price performance highlights a persistent resistance to trend reversal. While ETF inflows provide a consistent floor, they are not currently acting as a catalyst for rapid price appreciation. The market is effectively 'range-bound,' with participants awaiting a technical confirmation—specifically a breach of the $1.10 resistance level—before committing significant capital. The lack of momentum, evidenced by the 4-hour RSI hovering at 46, suggests that while the downside risk is mitigated by the $1.00 support, the upside remains capped by broader macro headwinds and a lack of retail participation. Investors should view this as a potential accumulation phase rather than a breakout, noting that the sustainability of the current price level depends heavily on the continued stability of ETF inflows and the absence of further macro-driven liquidity shocks.