XRP Faces Lawsuit Collapse Amid Speculation-Driven Rebound

XRP experienced a technical rebound toward $1.61 in early February 2026 after briefly dropping to $1.50. However, this apparent improvement masks deeply concerning market dynamics. Blockchain data reveal that a 70% collapse in exchange outflows coincides with a rebound almost entirely driven by short-term speculative capital. With only 9.81 million XRP leaving exchanges in early February, compared to 31.38 million on January 31, buying pressure disappeared just when it was most needed. The current position at $1.45, with a +6.07% gain in the last 24 hours, offers brief relief but does not change the fundamental conclusion: conviction holders remain absent from the market.

The Fragile Structure of the Current Rebound: Why Speculators Are Not Enough

The rebound is being sustained solely by short-term traders operating on weekly to monthly timeframes. This shift is dramatic and revealing. The portion of XRP supply controlled by this specific group surged from 1.99% to 5.27% in just 48 hours – an indicator that “fast” capital entered the market, not “patient” capital.

Historically, this segment of participants sells at the first sign of uncertainty. On January 5, when XRP hit a peak of $2.35, it was exactly this group that heavily unloaded their positions, triggering the subsequent drop to $1.65. The fact that they are now dominating the market again suggests that the support level is built on speculative sand, not on institutional accumulation or long-term confidence. With a circulation rate of 60.92%, the available supply is largely controlled by these speculative traders and short-term holders.

Demand Vanished: How a 70% Collapse in Exchange Outflows Reveals True Weakness

The most critical indicator of “buy the dip” health has turned sharply bearish, signaling that actual demand for XRP at the current price is virtually nonexistent. Between January 31 and early February, exchange outflows contracted significantly – from 31.38 million to just 9.81 million XRP. This demand collapse represents a withdrawal of 68.7% of the buying pressure observed days earlier.

What does this mean? Instead of long-term investors capitalizing on low prices, they are precisely avoiding this level. The broader market rejected the opportunity to accumulate XRP, suggesting that the network is losing fundamental appeal among sophisticated investors. The speculative rebound lacks the depth needed to absorb a second wave of selling. When short-term traders exit – and history suggests they will – there is no structural base to support the price.

Critical Points for Break or Recovery

XRP is currently caught between two clearly defined technical scenarios. The first resistance level is at $1.69. Recovering and holding this level would be the first step toward stabilizing trader confidence. Above that, a move to $1.96 would be necessary to challenge the long-term downtrend channel that has defined XRP’s upper limits for months.

On the downside, the vital support zone is between $1.47 and $1.50 – exactly where the price tested last week’s low. Breaking this level would open the gates to $1.25. Even more concerning: a confirmed full breakdown of the downtrend channel would send XRP to $0.93, a territory not visited in months. This scenario would become reality if speculative holders execute panic exits simultaneously, creating a cascade of liquidations.

Risk Assessment and Important Considerations

The current market dynamics are unstable and highly reversible. The 70% demand collapse, combined with speculative dominance, creates a price structure vulnerable to a sudden adverse move. Broader macroeconomic conditions, shifts in overall crypto sentiment, and project-specific news could completely reconfigure this scenario.

This analysis is provided solely for informational and educational purposes and does not constitute financial, investment, or legal advice. HODL Wave metrics and exchange outflows are probabilistic by nature and do not guarantee future results. XRP remains a high-risk asset subject to extreme volatility. Always conduct thorough research (DYOR) and consult a licensed financial professional before making significant investment decisions.

Will the market absorb a new support test, or will demand collapse finally solidify into a definitive technical breakdown?