XRP's Bullish RSI Divergence: The Predictable Flow Outcome

A bullish RSI divergence forms when price makes a new lower low, but the Relative Strength Index indicator fails to follow, instead making a higher low. This pattern signals that bearish momentum is weakening, as the selling pressure that drove the price lower is losing conviction. The mechanism points to seller exhaustion, where weaker holders have already exited their positions, leaving the market to be absorbed by larger, more patient holders.

This specific signal has a proven historical track record. The divergence currently forming on XRP's daily chart is the same pattern that emerged at its 2022 market bottom. That period preceded one of the strongest counter-trend rallies in the asset's recent history, lending weight to the current setup as a potential early reversal signal. The pattern suggests the recent price weakness may be a final capitulation before a shift in momentum.

The divergence is supported by on-chain data showing a reduction in selling pressure. While price has pulled back, the volume of XRP being transferred at a loss has compressed, indicating fewer holders are willing to sell at a loss. This dynamic of weak hands exiting while larger holders absorb supply creates the technical foundation for the RSI to rise even as price drifts lower.

The Flow Catalyst: Inflows vs. Price Weakness

The core tension here is stark. Despite a price drop of about 61% from its July 2025 peak, spot XRP ETFs have drawn cumulative inflows of about $1.37 billion since their late-2025 launch. This creates a classic setup where strong institutional capital inflows conflict with persistent price weakness, a dynamic that historically resolves with a significant price move.

This divergence is the flow catalyst. While the broader market faces headwinds, XRP's ETFs have extended their inflow streak, showing demand that isn't being met by selling pressure. On-chain data suggests this capital is being absorbed by larger holders, with weak hands exiting while the institutional pipeline remains open. The mechanism is clear: sustained inflows build a latent bid, which can only be satisfied by a price move higher to absorb the incoming supply.

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Ripple's new EU regulatory approvals add a structural tailwind to this flow. The company has secured new EU regulatory approvals, expanding its compliance footprint and positioning XRP for broader institutional and enterprise adoption. This regulatory clarity reduces friction for banks and financial firms, potentially accelerating the institutional demand already visible in ETF flows. The bottom line is that the institutional capital channel is opening, even as price action remains subdued.

The Predictible Outcome: A Breakout Signal

The historical pattern is clear. A bullish RSI divergence that mirrors the setup seen at XRP's 2022 bottom has preceded some of the asset's strongest rallies. This time, the divergence is paired with a powerful flow catalyst: steady institutional inflows into spot ETFs and new regulatory approvals expanding Ripple's footprint. The mechanism for a breakout is straightforward: the latent bid from institutional capital must find a price level to absorb.

The immediate technical target is a decisive break above the key resistance zone near $1.65-$1.67. This level, identified as dynamic resistance on the Ichimoku Kijun line, represents the current ceiling for the downtrend. A sustained move above it would signal a major shift in momentum, confirming that the institutional capital flowing in is now overpowering the remaining selling pressure. The bottom line is that the setup is primed for a sharp, breakout move.

The long-term catalyst is regulatory clarity. As market experts note, a significant amount of new money could enter the market once the rules are clarified. With the SEC case resolved and EU approvals secured, the barriers for hedge funds and asset managers are falling. This structural tailwind, combined with the technical and flow signals, creates a powerful alignment for a bullish reversal. The predictable outcome hinges on price finally clearing that $1.65-$1.67 ceiling.