Why is XRP falling even as ETF money keeps flowing into the market?

XRP has fallen 1.7% over the past 24 hours to around $1.39 as long liquidations have increased and the token has struggled to hold above $1.40.

According to Coingecko, XRP was trading near $1.39 on Sept. 8, with the token down 0.7% over the past seven days and 8.9% over two weeks. 

XRP has now given back much of its Sept. 4 move towards $1.48, while sellers have repeatedly pushed the price back below $1.40.

The latest decline has coincided with a sharp reduction in leveraged positions. 

XRP open interest fell 14% from $558 million to $478 million, while the estimated leverage ratio dropped from 0.203 to 0.182, according to CryptoQuant data.

Roughly $14.2 million in XRP positions were liquidated across two sessions. 

The second session accounted for $8.23 million in long liquidations, while the funding rate fell to -0.002 after 14 consecutive positive sessions.

The selling has come as the rest of the crypto market trades lower. 

Bitcoin fell 1.06% to around $79,300 on Sept. 8 after briefly touching $78,680, while Ethereum dropped 0.71% to around $2,495. Solana lost 1.91% and XRP was down 1.20% at the time of publication.

According to Coinglass data, roughly $179 million was liquidated over the past 24 hours, including $126 million from long positions. 

Traders are now watching upcoming US inflation figures and the Federal Reserve's September policy decision.

Demand from US spot XRP exchange-traded funds has remained positive, but the amount of fresh capital entering the products slowed last week. 

SoSoValue data showed $18.96 million in net inflows during the Aug. 31 to Sept. 4 trading week, compared with $110.49 million in the previous week.

Franklin Templeton's XRPZ attracted $9.82 million during the latest week, while Canary Capital's XRPC took in $7.74 million. Bitwise's XRP fund recorded $3.32 million in net outflows. 

Cumulative net inflows across US spot XRP ETFs remained at $1.68 billion, with combined net assets of $1.48 billion.

Profit-taking following XRP's August rally has put more pressure on the token. 

XRP climbed from close to $1 at the start of August to around $1.70 during the month before traders began locking in gains.

Recent price action has left the $1.43 to $1.46 area as resistance.

XRP briefly moved close to $1.48 on Sept. 4 but failed to hold the move and has since produced lower short-term highs while returning towards $1.38.

XRP price analysis

XRP's daily chart shows the price at around $1.39 after the pullback from its early September high. 

XRP/USDT 1-day price chart. Source: TradingView.

Despite the latest selling, the token remains above its 20-day, 50-day, 100-day and 200-day exponential moving averages.

The 20-day EMA sits near $1.35, while the 200-day EMA is close to the same level at $1.35. The 50-day and 100-day EMAs remain lower at roughly $1.26 and $1.24.

With two moving averages converging around $1.35, a daily close below this area would remove a support level that has held since XRP's early September recovery. 

The next levels below sit around $1.33 and $1.28. Holding $1.35 would keep $1.43 in reach, followed by the recent $1.48 to $1.50 zone.

Money Flow Index has dropped to 27.81 from above 80 following the early September price jump. 

A reading below 20 would put the indicator in its conventional oversold zone, while the current reading shows that buying pressure has fallen sharply during the move back towards $1.39.

On the 4-hour chart, XRP is trading close to the 50% Fibonacci retracement of its recent move from roughly $1.33 to $1.43. The midpoint sits around $1.38, almost level with the current price. See below.

XRP/USDT 4-hour price chart. Source: TradingView.

The 61.8% retracement lies around $1.37, followed by the 78.6% level near $1.35. 

A break through both would expose the previous swing low around $1.33. 

The 1.618 Fibonacci extension then puts a lower target near $1.27, close to the $1.28 support visible from recent price action.

Chaikin Money Flow stands at -0.12 on the 4-hour chart after dropping below zero. 

Negative CMF means trading volume has been weighted towards periods when XRP closed lower within its candle ranges, consistent with sellers controlling the latest move.

For buyers to regain control, XRP would first need to reclaim $1.40 to $1.41. 

A move through $1.43 would clear the recent 4-hour swing high and open the way towards $1.48 to $1.50, while a loss of the $1.35 EMA and Fibonacci support cluster would put $1.33 and then $1.27 to $1.28 back in focus.