XRP is showing early signs of recovery as the funding rate has turned positive, while the price shows a bullish divergence with an indicator. In addition to this, the XRP available on exchanges has dropped drastically, cutting down the supply. This could be the point at which the year-long downtrend could come to an end.
XRP loses 70% during a 1-year-long fall
XRP’s almost year-long downtrend might come to an end as the relative strength index flashes a bullish divergence. The coin’s downfall began back in July 2025, when it hit $3.50. With XRP reaching above $3, a sell-off is an expected event in all markets when the price reaches the pinnacle. Over the course of 12 months, XRP has dropped from $3.50 to its current price of $1.06, marking a decline of nearly 70%.
However, after the relative strength index entered the oversold region, the RSI is once again recovering. As shown in the chart above, although the RSI is making higher lows, the XRP price is still making lower lows, and this is considered a bullish divergence.
This means that although the prices have not flinched a bit and the downtrend continues, the bulls are behind and they are mounting the pressure. And there will come a threshold point where the bears can’t keep the prices under subject, and at that point the prices will appreciate.
XRP traders pay premium to hold long positions
In addition to this, derivative markets are also showing signs that the bulls are around. The funding rate is skewed to the positive side, and this means that the traders are willing to pay a premium to hold long positions.
Positive funding rates typically suggest that demand for leveraged bullish bets outweighs bearish positioning, highlighting growing confidence in the asset’s near-term outlook.
While elevated funding can sometimes signal an overcrowded market, the current readings suggest that traders expect XRP to recover from recent losses rather than extend its decline. Combined with the bullish divergence forming on the Relative Strength Index (RSI) and declining exchange reserves, the derivatives data strengthens the case that buying interest is gradually returning to the market, potentially laying the foundation for a broader price recovery.
XRP available on exchange reserves falls drastically
In addition to improving sentiment in the derivatives market, XRP’s exchange reserves have also declined, signaling a shift in investor behavior. Falling exchange reserves typically indicate that holders are withdrawing their tokens from centralized exchanges into private wallets or long-term storage.
This reduces the immediate supply of XRP available for trading, which can ease selling pressure in the short term. From a price perspective, this is generally considered a bullish signal, as lower exchange balances suggest reduced intent to sell and a growing preference for holding. If demand continues to strengthen alongside this declining supply on exchanges, it could create conditions that support further upside momentum in XRP’s price.
