XRP Faces Critical February Test: Can ETF Inflows Offset Bearish Technicals?

XRP begins February 2026 on shaky ground, extending a monthly decline of approximately 5% amid broader market uncertainty. Historical data casts a shadow over the coming weeks, with the token's median February return standing at a stark -8.12%. The memory of last February's nearly 29% plunge looms large for investors.

This year, however, the picture is more nuanced. While technical charts warn of continued downside risk, emerging on-chain data and institutional activity suggest a potential floor is being established. The battle between bearish seasonality and strategic accumulation will likely define the month's price action.

On the two-day chart, XRP remains confined within a long-term descending channel—a pattern of lower highs and lower lows that has governed its price since mid-2025. As February begins, the token is drifting perilously close to this channel's lower boundary, increasing the threat of a breakdown.

"Seasonal patterns are a factor, but they don't operate in a vacuum," noted Vasily Shilov, Chief Business Development Officer at SwapSpace. "The current environment is defined by a clash between macro caution and targeted crypto asset accumulation."

Beneath the surface, momentum indicators tell a complex story. A hidden bearish divergence between price and the Relative Strength Index (RSI) in early January accurately preceded a sharp 30% drop. Now, a nascent bullish divergence is attempting to form, suggesting selling pressure may be exhausting. For this signal to confirm, XRP must hold above its January low while the RSI climbs higher.

The institutional narrative provides a glimmer of optimism. The Chaikin Money Flow (CMF), tracking large-wallet activity, trended upward through much of January even as prices fell. This divergence hints at quiet accumulation by sophisticated players. Spot XRP ETF flows, despite a rocky start to January with notable outflows, showed steady improvement toward month-end, with total inflows since launch surpassing $1.3 billion without a single month of net redemptions.

"The ETF volatility reflects a flight to traditional safe-havens, not a rejection of XRP's thesis," Shilov explained. "The sustained baseline demand is the more telling metric."

Yet, a significant red flag waves from exchange data. XRP's exchange flow balance has swung sharply into positive territory since mid-January, with three distinct inflow peaks in late January mirroring a pattern that preceded an 18% drop earlier in the month. This indicates rising selling pressure on exchanges, directly challenging the optimism from ETF and whale data.

Whale wallets holding over 1 billion XRP have increased their holdings from 23.35B to 23.49B tokens since the correction began—a notable deployment of capital during weakness. Interestingly, these mega-holders are building positions earlier in the cycle compared to 2025, potentially cushioning against a deep collapse.

"Current whale activity looks tactical, not overwhelmingly bullish," cautioned Shilov. "It provides support but doesn't guarantee an imminent rally, especially if ETF flows waver."

Key Levels to Watch

The immediate battleground is clear. On the downside, the critical support zone lies between $1.71 and $1.69. A sustained break below this level could trigger a slide toward $1.46, and potentially $1.24 if selling accelerates.

For the bulls, the line in the sand is $1.97. A decisive two-day close above this resistance level would signal a shift in momentum, potentially opening a path toward $2.41, where key Fibonacci and channel resistance converge.

"The strongest catalyst for a sustained breakout would be a return of consistent, heavy ETF inflows," Shilov concluded. "Until then, XRP remains at the mercy of the tug-of-war between exchange deposits and strategic accumulation."

The outcome of this clash will likely set XRP's course not just for February, but for the ensuing quarter.

Market Voices

"This is the same tired pattern—promise of institutional demand versus the reality of retail selling pressure. The exchange inflow data is screaming warning signs that the ETF narrative is ignoring. I'm staying clear until we get a clean break above $2."
— Marcus Thorne, Independent Crypto Trader (Sharply Critical)

"The whale accumulation during this dip is the most compelling data point. Smart money is building a position, and the ETF flow structure, while volatile, has never turned net negative overall. This looks like consolidation before the next leg up."
— Dr. Lena Chen, Portfolio Manager, Digital Horizon Capital

"The technicals are messy, which reflects the overall market indecision. I'm neutral here. The play is to wait for a confirmed break of either $1.69 or $1.97 before committing capital. Risk management is key in this environment."
— David Park, Head of Research at Ascent FinTech Advisory

"As a long-term holder, these monthly fluctuations are noise. The fundamentals of the token and its utility haven't changed. The ETF is a permanent new source of demand. I'm using weakness to dollar-cost average."
— Sarah Miller, Founder of Crypto Literacy Non-Profit