XRP demand weakened across three fronts in early July as on-chain activity, futures positioning, and spot ETF flows all cooled. However, extreme bearish funding rates have drawn the attention of analysts, who read such conditions as a possible setup for a rebound.
Cooling Demand
On-chain activity on the XRP Ledger has slid in July, with Santiment recording 25,350 active wallets, the second-lowest daily reading of 2026. New wallet creation fell to 2,130, the weakest level since November 2024. Analysts note that this decline in activity may indicate traders are waiting for a real catalyst instead of chasing another small bounce.
Derivatives and ETFs
Derivatives told a similar story, with XRP futures open interest on Binance dropping to roughly 397 million XRP, the metric’s lowest level in over three months. Institutional demand has also cooled, with US spot XRP ETFs posting a $7.29 million net outflow on July 8, their largest single-day withdrawal since March.
Potential Rebound
Despite the bearish signs, analyst Darkfost flagged a contrarian angle, noting that XRP funding rates on Binance have reached extreme negative levels after the token fell about 70% from its July 2025 high. Such one-sided pessimism often precedes a turn, with Darkfost noting a comparable setup in April 2025 near $1.25, which was followed by a 126% rally. Growth in tokenized assets, payment use cases, EVM sidechain expansion, and on-chain lending could pull users back if any of these narratives gain traction.
Based on reporting from crypto.news.
