Understanding XRP Price Movements Amidst Spot ETF Inflows
The cryptocurrency market has been buzzing with discussions surrounding XRP. Despite six consecutive weeks of spot ETF inflows surpassing $1.01 billion, XRP’s price has underperformed, dropping 14% over the past month. Let’s break down why XRP’s price growth hasn’t mirrored the bullish ETF inflow numbers.
Spot ETF Inflows: A Promising Start, But Slowing Growth
From mid-November to December, XRP spot ETFs recorded significant inflows, marking six weeks of consistent investment. The momentum began strong:
- Week of November 14: $243.05 million
- Week of November 21: $179.60 million
- Week of November 28: $243.95 million
The week of December 5 saw momentum peak again at $230.74 million. However, inflows began cooling, declining to $93.57 million (week of December 11) and ultimately to just $19.44 million by December 16. This gradual slowdown highlights a deceleration in ETF demand, which could partially explain why XRP’s price has struggled to rise further.
On-Chain Metrics: A Mixed Bag of Signals
In addition to cooling ETF demand, on-chain data offers a clearer picture of XRP’s stagnation. One concerning trend is the activation of older supplies. The percentage of XRP last active more than a year ago surged from 48.75% (December 2) to 51% (mid-December), indicating that long-held supplies are entering circulation, often exerting downward pressure on prices.
However, not all on-chain signals are bearish. The Hodler net position change metric for wallets holding XRP over 155 days showed a reduction in selling pressure. Net outflows dropped from 216.86 million XRP (December 11) to 154.57 million XRP (December 16)—a 29% decrease. This mixed data creates a tug-of-war between selling pressure from older supplies and reduced sell-offs by long-term holders.
Price Outlook: Key Levels to Watch
For XRP bulls, the critical resistance level to breach is $2.28. If achieved, a daily close above this level could trigger a breakout from the current falling wedge pattern, potentially offering a 19% upside. On the downside, losing $1.74 (the 0.618 Fibonacci level) could expose XRP to deeper declines toward $1.59 or even $1.41 if bearish momentum intensifies.
Investment Tip: Secure Your Crypto Holdings
While XRP’s price remains volatile, ensuring the safety of your crypto assets is crucial. Consider using a secure hardware wallet like the Ledger Nano X for safeguarding your investments. This top-rated wallet offers advanced security for managing cryptocurrencies like XRP and keeps your assets safe from external threats.
Conclusion
The current XRP market dynamics reveal a delicate balance. While ETF inflows have brought optimism, cooling demand and mixed on-chain metrics suggest a cautious outlook. Monitoring key support and resistance levels, along with staying informed about market developments, will be crucial for investors navigating this volatile environment.
