XRP price is on the verge of a 20% decline, as rising Binance reserves, increasing short positions among traders and whales, and the price hovering near a key support level support the bearish outlook.
The negative outlook for XRP price just intensified as its reserves on Binance increased notably, while the price action remained sideways near the key support level of $1.25. The asset saw a weekly decline of 2.7% and was trading at $1.33 at press time.
These developments, including growing exchange reserves and the price decline, appear to be turning trader sentiment bearish. Data shows that intraday traders are strongly betting on short positions, potentially anticipating further downside.
On Tuesday, data from CryptoQuant surfaced, revealing that XRP reserves on Binance surged from 2.625 billion to 2.661 billion tokens, an increase of 36 million tokens.
In the crypto market, growing asset reserves on exchanges typically flash a bearish sentiment, as investors and long-term holders may move their assets onto exchanges in preparation for a potential sell-off.
Another aspect indicating a negative outlook for XRP price is Wintermute’s $4.10 million short position in XRP, as reported by Onchain Lens. The post on X further reveals that the market maker has also taken short positions worth $22.61 million in Ethereum (ETH) and $12.65 million in Solana (SOL).
Reflecting these developments and the current market sentiment, intraday traders appear to be following a similar trend, according to data from the derivatives platform CoinGlass.
The data shows that $1.285 on the lower side and $1.317 on the upper side are two key levels where traders appear to be overleveraged. In fact, traders have built $19.75 million worth of long positions and $29.85 million worth of short positions.
These bets suggest strong selling pressure, while bulls appear to be losing strength.
As per TradingView’s daily chart earlier today, XRP continued to move sideways for the fourth consecutive day near the key support level of $1.25. However, at press time, the asset was seen climbing to $1.31, up 0.8% in 24 hours
Earlier, on September 16, 2026, when the price fell to this support level, it witnessed a strong reversal. However, this time, on-chain and derivatives data flash warning signs for a potential price reversal.
Based on the current price action, an XRP price reversal could be possible only if the asset sustains above the $1.25 level. If this scenario unfolds, XRP could potentially repeat its previous price action and witness a strong reversal.
On the other hand, if XRP falls below the $1.25 level, it could face a sharp downside move of nearly 20%, potentially reaching the next support level near $1. At present, XRP’s Chaikin Money Flow (CMF) has turned negative, reading -0.07, indicating capital outflows and growing selling pressure in the market.
However, the price is trading near the lower boundary of the Bollinger Bands, which could act as a potential support level and trigger a short-term rebound if buying pressure emerges.
Despite these bearish developments, a well-followed crypto analyst shared a post on X revealing that transaction volume on the XRP Ledger has surged as the price hovered around the $1.25 support level.
The post revealed that the total dollar value of coins transferred on-chain skyrocketed to $49.70 billion, coinciding with the rebound currently underway. This surge in on-chain activity around such a critical support level suggests that $1.25 could mark the bottom.
The analyst also added that as long as this support continued to hold, XRP might be on track for a bull rally toward the $2 level.
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