XRP price rebounded nearly 30% after hitting a 2026 low of $1.10, but technical and options data suggests investors remain cautious. Key indicators show a potential ‘dead cat bounce’ scenario, with sophisticated traders pricing in a less than 6% probability of the asset reclaiming the $2 level this month.
The altcoin XRP declined to a yearly low of $1.10 in early February before recovering by 30% to $1.40. This rebound, forming what appeared to be a V-shaped recovery, was fueled by a strong volume surge and a positive signal from the MACD momentum indicator.
However, the possibility of a ‘dead cat bounce’—a temporary recovery before new lows—remains. The Relative Strength Index (RSI) was still below average, and whale selling pressure, while easing, has been persistently negative.
Options data from Amberdata reveals a negative market sentiment for the rest of February. The 25-Delta Risk Reversal metric was negative, indicating greater demand for downside protection than for bullish bets.
Unless the metric flips to neutral or positive, the relief rally could end up being a ‘dead cat bounce,’ the analysis noted. Traders on Deribit have priced only a 5.6% chance of XRP reclaiming $2 this month.
For the recovery to extend, bulls would need to clear overhead hurdles at $1.60 and $1.80. The whale flow metric, which tracks large investor pressure, has been negative since July but has eased by half since January.
