XRP Price Drops Despite ETF Launch

The debut of the first XRP spot ETF on Nasdaq initially surprised investors as XRP’s price fell by approximately 8%, contrary to expectations of an immediate price increase. Data indicates that while initial inflows were substantial, they were insufficient to significantly impact XRP’s $138 billion market capitalization.

Day one ETF inflows totaled around $245 million, with a trading volume of $60 million, setting a record for a new XRP product. However, this represents less than 1% of XRP’s total market value, failing to generate sufficient demand pressure to offset profit-taking and cooling hype.

Contrary to some assumptions, ETF inflows do not always translate to direct spot market buying, preventing an instant price surge. Analysts estimate that XRP would require inflows of 10 to 15 times the current amount, roughly $3 to $5 billion daily, to trigger a meaningful price breakout.

Approximately 2.4 billion XRP tokens, valued at around $5 billion, are currently liquid on major exchanges, with OTC desks holding an additional $5 to $12 billion in deep liquidity. Institutions often pay a 5% to 15% premium when purchasing XRP through OTC desks to avoid impacting the spot market price, a positive factor for long-term supply reduction but not an immediate price catalyst.

Technical analysis reveals a bullish divergence on the Relative Strength Index (RSI), potentially signaling a trend reversal. A confirmed breakout requires daily closing prices above $2.68. This may necessitate simultaneous launches of multiple XRP ETFs to generate enough demand.

To initiate a price increase of approximately 40 to 25 cents, daily inflows of $1 to $3 billion might be necessary. Inflows of $5 billion or more could potentially trigger a more substantial rally.

CoinPedia, since 2017, strives to deliver accurate cryptocurrency and blockchain updates adhering to strict Editorial Guidelines based on E-E-A-T. Every article is fact-checked against reputable sources to ensure accuracy and reliability.

Disclaimer: All opinions expressed represent the author’s own views on current market conditions. Readers are encouraged to conduct their own research before making investment decisions. Sponsored content and affiliate links may be present on the site, but editorial content remains independent.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.