Why is XRP rebounding despite falling demand from traders?

The cryptocurrency market was briefly bearish on Tuesday, with Bitcoin briefly falling below $69,000.

Ether also dropped near the $2,000 psychological level before bouncing back.

XRP, the native coin of the Ripple ecosystem, briefly dropped to the $1.38 zone, with the bulls holding the Monday low of $1.36 despite the selloff.

It has now bounced back and currently trades at $1.422 per coin. The recovery comes despite cooling retail and institutional demand for XRP products.

Retail and institutional demand for XRP cools

XRP is up by 1% in the last 24 hours and now trades at $1.422 per coin.

It has lost its fourth place in the market to BNB once again due to its poor performance over the last few hours.

The coin recovered from yesterday’s slump despite declining retail and institutional interest.

CoinGlass’s futures Open Interest (OI) for XRP reads $2.53 billion, down from the $2.87 billion recorded a week ago.

The decline in OI over the past few days indicates persistent risk-off sentiment among retail investors.

The retail interest sits significantly below the record $10.94 billion, a level that coincided with XRP hitting $3.66, its current record high in July.

If derivatives demand fails to steadily recover, it would make it harder for XRP to embark on a sustainable recovery run.

Furthermore, demand for XRP spot Exchange-Traded Funds (ETFs) has cooled in recent days.

While there was no activity on Monday, spot XRP ETFs recorded an inflow of $977,860 on Tuesday.

Bitwise’s XRP ETF was the only source of inflows, with other funds also recording muted activity on Tuesday.

Despite the inflow, the overall sentiment still lags as the funds recorded only two days of inflows over the past five days.

Cumulative inflows stand at $1.31 billion, and net assets under management at $1.11 billion.

In its latest report, CoinShares pointed out that in addition to the uncertainty driven by the ongoing Middle East war, the Federal Reserve’s (Fed) hawkish stance on interest rate cuts in 2026 continues to weigh on the market.

Technical outlook: XRP eyes the $1.51 FVG

The XRP/USD 4-hour chart remains bearish and efficient, but the short-term outlook paints a mildly bullish picture.

Major moving averages appear to be capping potential rebounds from $1.49, and overcoming them in the near term would allow the bulls to regain firm control of the market.

Furthermore, the bulls have established a strong support around the $1.36 level, giving them the momentum to push the price higher in the near term.

The Moving Average Convergence Divergence (MACD) indicator fades toward the zero line, pointing to weakening bearish pressure after the recent dip to $1.36.

The Relative Strength Index (RSI) stabilizes at 50, reinforcing a neutral outlook rather than a decisive uptrend.

If the bullish trend persists, initial resistance lies at the 50-day Exponential Moving Average (EMA) around $1.49, followed by the recent swing high near $1.54.

The FVG at $1.51 could also provide resistance in the near term.

Breaking above these levels would reopen the path toward the 100-day EMA at $1.67 and later the 200-day EMA at $1.92.

However, if the recovery fails, immediate support is seen around the $1.36 Monday low.

Failure to hold above this supply level could trigger an extended decline toward the next support at $1.25.