XRP demand weakened across on-chain activity, derivatives, and ETF flows in early July, but extreme negative funding rates after a 70% price drop from its 2025 high hint at a possible reversal, according to analysts. Active wallets on the XRP Ledger hit 25,350 — the second-lowest daily reading of 2026 — while new wallet creation fell to 2,130, the weakest since November 2024. Meanwhile, XRP futures open interest on Binance dropped to roughly 397 million XRP, a three-month low, and US spot XRP ETFs posted a $7.29 million net outflow on July 8, their largest single-day withdrawal since March.
On-Chain and Derivatives Activity Cool
Santiment data shows that on-chain activity on the XRP Ledger has slid in July. Active wallets reached 25,350, the second-lowest daily reading of 2026, and new wallet creation fell to 2,130 — the weakest level since November 2024. Santiment noted that after late-June dip-buying excitement, traders appear to be waiting for a real catalyst rather than chasing another small bounce.
Derivatives tell a similar story. XRP futures open interest on Binance dropped to roughly 397 million XRP, the metric’s lowest level in over three months. A falling reading during price weakness usually indicates that traders are trimming leveraged exposure. One analyst noted that while a decline in open interest is not necessarily a definitive bearish signal, it does point to reduced trader participation in the derivatives market, often representing a period of repositioning as investors await clearer market direction.
ETF Flows Turn Negative
Institutional demand has cooled as well. US spot XRP ETFs posted a $7.29 million net outflow on July 8, their largest single-day withdrawal since March. The weekly picture also turned negative: while Bitcoin and Ethereum ETF flows swung positive in the week ending July 10, per SoSoValue, XRP went the other way, posting a red week that broke a nine-week inflow streak.
Funding Rates Hint at Reversal
Despite the bearish signs, analyst Darkfost flagged a contrarian angle. XRP funding rates on Binance, aggregated over 30 days, have reached extreme negative levels after the token fell about 70% from its July 2025 high. Such one-sided pessimism often precedes a turn. Darkfost noted a comparable setup in April 2025 near $1.25, which was followed by a 126% rally. The analyst stated that when such a strong consensus forms, especially after a correction on the order of 70%, it is often a sign that a potential reversal may be developing over the medium term.
Potential Catalysts
Santiment sees potential catalysts beyond price. Growth in RLUSD, tokenized assets, payment use cases, EVM sidechain expansion, and on-chain lending could pull users back if any of these narratives gain traction. For now, spot flows rather than leverage may steer XRP’s price. The next decisive move likely depends on whether one of those catalysts revives on-chain activity.