XRP ETFs Face Outflows, Raising Concerns Over $1 Barrier
Ripple’s cross-border token, XRP, has recently experienced a shift in market sentiment, moving from robust institutional demand to facing potential downward pressure. This comes as spot XRP Exchange Traded Funds (ETFs), which had previously seen significant inflows, are now grappling with substantial outflows, a stark contrast to their earlier performance.
ETF Performance Reverses Trend
The launch of the first spot XRP ETF in the U.S. by Canary Capital in November marked a significant development, offering investors direct exposure to the asset. This was followed by similar products from Bitwise, Franklin Templeton, 21Shares, and Grayscale. Collectively, these ETFs had amassed nearly $1.5 billion in net inflows since their inception, demonstrating sustained investor interest even during a broader market downturn that affected XRP’s price.
However, the trend appears to have reversed in recent days. For the first time since March, outflows have surpassed inflows over two consecutive days. This development suggests a potential reduction in exposure to XRP by institutional investors such as pension funds and hedge funds. Consequently, ETF issuers may be compelled to sell their holdings, adding further downward pressure on the token.
Price Volatility and Analyst Outlook
The asset’s price recently dipped close to the $1 mark, sparking fears among some that bears could push it below this critical psychological level for the first time since late 2024. While bulls managed to reclaim some ground, XRP is currently trading around $1.11, according to CoinGecko.
Analyst Diana, on the X platform, expressed caution, predicting a potential fall to $0.87 if XRP breaks below $1.08 again. Conversely, she noted that maintaining this level could pave the way for an increase to $1.30.
Factors Suggesting Potential Upswing
Despite the recent ETF outflows, several indicators suggest a potential upcoming upswing for XRP. The amount of XRP held on the Binance exchange has recently fallen to a four-month low, indicating reduced selling pressure.
Furthermore, popular analyst Ali Martinez highlighted that the Tom DeMark (TD) Sequential Indicator has flashed a buy signal for XRP on a monthly scale, a signal also observed for other major cryptocurrencies like Bitcoin, Ethereum, and Solana. Martinez explained that such trend-exhaustion setups on higher timeframes carry significant weight, and historically, concurrent monthly buy signals across multiple assets have indicated seller fatigue and a high probability of a long-term market bottom.
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