XRP (CRYPTO: XRP) fell 7% over the past 24 hours, even as crypto analyst Ali Martinez calls the crowd's growing bearishness "constructive" for a potential reversal.

Sentiment Turns Bearish Even as the Chart Improves

Martinez flagged XRP's social sentiment dropped to its lowest level since July, with the crowd growing increasingly pessimistic even as price action tells a different story.

From a contrarian view, he argued, that shift could actually help the bulls, since XRP appears to be forming a potential inverse head-and-shoulders bottom the broader crowd hasn't recognized yet. "The bullish trade may not be overcrowded yet," he wrote.

Meanwhile, analyst More Crypto Online pointed that XRP broke out of its descending channel and pushed toward $1.34 resistance, following a complete three-wave decline that bottomed near $1.21, where two separate technical support points converge.

The current pullback needs to hold a higher low before XRP can clear $1.34, he said, a sequence that would help confirm the start of a larger upward move. If $1.21 fails, the next support zone extends down toward $1.11.

Exchange Outflows and ETF Flows Send Mixed Signals

As Benzinga reported Thursday, XRP investors withdrew 418.5 million tokens worth nearly $540 million from Binance, the largest daily outflow in nine months, pushing Binance's XRP scarcity index to its highest reading since 2022.

Fewer coins on exchanges typically means less available supply to sell, a dynamic that can support price if demand holds steady.

CryptoQuant analyst Darkfost noted the withdrawals exceeded even the 315 million XRP pulled during Binance's hack on Oct. 29, and cautioned some transfers could reflect internal exchange activity rather than fresh demand.

However, US spot XRP ETFs have logged roughly $529,510 in net outflows this week through Thursday according to SoSoValue.

If Friday also closes negative, that would snap a two-week streak of inflows totaling $4.32 million and $4.25 million.

That streak itself followed a 13-week consecutive inflow run through mid-October that brought in roughly $1.8 billion total, before breaking with a $1.84 million outflow in mid-October.