SKN | XRP Falls 7% After a 16% Weekly Surge: Is the Rally Losing Momentum?

Key Points:

• XRP surged 15.8% to $1.66 through September 23 before falling 6.9% the following day, leaving the token near $1.51.
• The recent rally was heavily influenced by approximately $300 million in forced short liquidations, raising questions about how much underlying spot demand remains after leveraged positions were closed.
• ETF flows, the September 29 Batch upgrade and the October 1 escrow release could become important catalysts as XRP approaches a key support zone near $1.48.

XRP’s sharp September rebound has lost momentum after the token climbed from approximately $1.30 to $1.66 in six days before falling nearly 7% in a single session. The reversal highlights a central question for the market: whether XRP’s latest advance reflects durable demand or was amplified primarily by the unwinding of crowded bearish positions across crypto derivatives.

Short Liquidations Powered the Initial Breakout

The strongest part of XRP’s rally coincided with a broader Bitcoin-led move that triggered approximately $300 million in short liquidations. When leveraged traders holding short positions are forced to close, exchanges buy the underlying asset to settle those positions, creating additional upward pressure.

That mechanism was particularly relevant for XRP because its funding rate had remained negative for more than a week, indicating that bearish positioning had become relatively crowded. As Bitcoin moved sharply higher, XRP shorts were forced to unwind, accelerating the token’s move from the low-$1.40s toward $1.60.

CoinGlass data cited by Yahoo Finance showed approximately $313 million in crypto positions liquidated in one hour when Bitcoin crossed $84,000, with shorts representing 96% of the liquidated positions. Over 24 hours, liquidations reached roughly $710 million, with shorts accounting for 86%.

ETF Demand Has Not Matched the Price Surge

The distinction between forced buying and fresh capital is important for XRP’s next phase. September XRP ETF inflows have generally been in the $10 million to $19 million weekly range, below the approximately $28 million single-day peak recorded in August, according to the source analysis.

That does not mean institutional demand is absent. It does suggest, however, that ETF flows have not accelerated at the same pace as XRP’s price during the recent rebound. For comparison, U.S. spot Bitcoin ETFs attracted $731 million on September 3, while XRP ETFs recorded $19 million for the week through September 5.

The market therefore needs to distinguish between a rally supported by persistent capital inflows and one that benefited from temporary derivatives positioning. That distinction becomes more important after a sharp one-day decline.

Key Technical and Supply Catalysts Ahead

At approximately $1.51, XRP is trading close to the $1.48 support area identified in the source analysis. Yahoo Finance historical data shows XRP closed at $1.5718 on September 22 before falling to a September 24 intraday low of $1.4848, placing the market close to that support zone.

There are also two scheduled developments that could affect positioning. The September 29 XRP Ledger Batch upgrade could provide a network-specific catalyst, while Ripple’s planned October 1 escrow release represents another potential source of supply. Previous monthly releases have involved XRP being released from escrow and subsequently re-locked, meaning the headline release amount does not necessarily represent immediate market selling.

The Next Move Depends on Real Demand

For sophisticated investors, the most important test is whether XRP can stabilize after the liquidation-driven advance. A sustained recovery would require evidence beyond derivatives activity, particularly through spot-market volume, ETF inflows and continued network activity.

The recent 7% decline does not by itself establish that the rally has ended. XRP remains more than 15% above its level from a week earlier, according to current market data. The coming sessions will show whether the $1.48 area attracts renewed demand or whether the fading short squeeze exposes the market to further profit-taking. The September 29 upgrade and October 1 escrow event add further variables to an already closely watched market.