Understanding XRP’s Recent Price Drop Following ETF Launch
Although the launch of Canary Capital’s XRP Spot ETF (XRPC) generated excitement among crypto enthusiasts, XRP’s price has fallen nearly 11% since November 13, even with significant ETF inflows. This performance has left many questioning the reason behind the price decline.
Massive ETF Inflows, But XRP Still Drops
The recently launched XRPC on Nasdaq saw a record-breaking $59 million in trading volume on its first day, with inflows surpassing $268 million within its first three trading sessions. Despite this strong demand, XRP’s price continues to drop, currently trading at $2.14, marking a 5.22% daily drop.
Reports from analytics platform Glassnode revealed an unexpected market dynamic. Only 58.5% of XRP holders are currently in profit, the lowest percentage since late 2024 when XRP was priced at $0.53. Furthermore, 41.5% of XRP’s supply, around 26.5 billion tokens, now sits at a loss, indicating that late buyers are largely responsible for this price fragility.
The Impact of Whales and Market Conditions
One of the primary reasons behind XRP’s decline seems to be the actions of crypto whales. During the ETF’s launch window, large investors sold approximately 200 million XRP tokens, offsetting the ETF’s positive momentum. This activity suggests significant profit-taking, with whales capitalizing on the hype surrounding the ETF launch.
Moreover, the overall cryptocurrency market has been grappling with broader issues. Over the past month, the sector has lost $1.1 trillion in market value, causing downward pressure across multiple assets, including XRP. Experts highlight that institutional liquidity often takes time to impact asset prices significantly, meaning that the benefits of the ETF inflows may not be apparent until 2026.
Looking at Technical Indicators
Despite this challenging market environment, there might be some good news for investors. XRP’s Net Unrealized Profit and Loss (NUPL) metric dropped to 0.32 on November 16, marking its lowest level in a year and indicating a potential market bottom. Historically, when NUPL reaches similar levels, XRP has rebounded significantly, as previously demonstrated when XRP climbed from $1.80 to $3.54 in 2024.
For those tracking market sentiment, we could be entering the fear and anxiety zone—a period historically associated with market bottoms. This signals that, while short-term performance may be shaky, the long-term outlook could remain positive.
How to Stay Ahead in Volatile Markets
Cryptocurrency markets are notorious for their volatility, and staying informed is key to navigating these fluctuations. Products such as the Ledger Nano X hardware wallet can help investors secure their XRP holdings, providing peace of mind during uncertain periods. Additionally, diversifying your crypto portfolio and following key market indicators can prepare you for future market movements.
Conclusion: Patience May Pay Off
While XRP’s recent price decline may have frustrated investors, the underlying market dynamics suggest a complex interplay between whale behavior, market weakness, and delayed institutional impact. By staying informed and adopting a long-term perspective, smart investors can position themselves for potential gains once market conditions stabilize.
