After XRP breaks through $2.12, is it institutional continuation or a rebound trap?

XRP recently broke through the key resistance of $2.12 strongly, with a 24-hour increase of over 3%, surpassing the previously multiple times resisted range. This breakthrough is not an isolated event but the result of a combined effect of ETF continuous accumulation, declining exchange supply, and improved on-chain activity. The current market structure leans positive, but whether the rally can continue depends on the confirmation of key price levels.

Triple Resonance Driving the Rally

Continuity of ETF capital inflows

The US spot XRP ETF is becoming a “stabilizer” in the market. According to the latest data, the ETF’s net inflow is about $13.59 million per day. Although the figure seems modest, the key to such capital flows lies in their sustainability and stability. Unlike short-term event-driven funds, ETF capital often acts as a “sponge” absorbing selling pressure during price volatility, providing market buffers.

In terms of scale, XRP ETFs have absorbed over $1 billion in less than two months, locking in approximately 746 million XRP, about 1% of the circulating supply. This means each round of selling is gradually digested by institutional funds, easing supply-side pressure.

Historical lows in exchange supply

The XRP balance on exchanges is approaching multi-year lows. The significance of this signal is—when the tokens available for immediate sale on exchanges decrease, the price elasticity is significantly amplified once demand recovers. In other words, this is not a direct factor pushing prices higher but a structural condition that can “magnify” gains when demand appears.

According to information, exchange balances have decreased by 58% over the past year, coinciding with the ETF accumulation timeline—institutions are absorbing, and retail investors are also fleeing exchanges. The reduction in supply means subsequent upward movements require less trading volume to achieve.

Effective technical breakout

From a technical perspective, XRP rose 2.04% on the day, with volume 47.6% higher than the 7-day average. This excess volume of 47.6% is a key confirmation of the breakout. After the breakout, the price did not quickly fall back but consolidated within the $2.128-$2.152 range, testing the $2.128 support multiple times, indicating bulls are attempting to consolidate the breakout.

This “breakout without retracement” pattern is regarded as a strong signal in technical analysis. If the support level can be effectively held, the subsequent upward space has a solid foundation.

On-chain activity improvement signals

Notably, the daily average number of transactions on the XRP Ledger has risen to nearly 1 million, indicating that the current market is not solely driven by short-term speculation. Genuine transfer demand is increasing, and network activity is improving. This is a key indicator to distinguish between a “speculative rebound” and “fundamental improvement”—rises driven by real usage tend to be more sustainable.

Key levels to watch next

The current market structure shows that prices are consolidating above the previous resistance rather than quickly falling back into the range. This is a positive signal, but whether the rally can continue depends on two factors:

• Whether the $2.128 support can hold during retests
• Whether the resistance at $2.15-2.16 can be effectively broken

Market backdrop support

This round of XRP rally is not isolated. The entire crypto market is rebounding, with Bitcoin breaking above $93,000 and Ethereum surpassing $3,200. XRP’s market cap has increased by 11.55% over the past week, surpassing BNB to become the third-largest cryptocurrency by market cap. This sector-wide linkage indicates rising risk appetite in the market, providing a broader market context for XRP’s rise.

Summary

ETF accumulation, declining exchange supply, technical breakout, and improved on-chain activity—these four factors form an ideal resonance combination. The current upward structure of XRP is indeed improving, but confirmation is key. In the short term, whether $2.12-$2.13 can hold during retests will be the core signal to determine if this rally continues or enters another consolidation. If support levels are effectively maintained, targets of $2.20 or even $2.28 are possible; otherwise, re-evaluation is needed. For traders, the key at this stage is to wait for this confirmation signal rather than chase blindly.