The cryptocurrency XRP is currently caught in a contradictory market dynamic. On one hand, its price struggles below key psychological levels, with technical indicators flashing short-term caution. On the other, institutional investors are accumulating the asset at a record pace. This growing divergence between a weak price chart and strong fundamental demand from ETFs prompts a critical market question: when will the significant reduction in available supply finally be reflected in the valuation?
Institutional Buying Creates a Supply Squeeze
Contrasting sharply with the present price softness is the activity of institutional funds. Since the approval of XRP spot ETFs in November 2025, these investment vehicles have seen historic inflows. Data from 21Shares reveals that over $1.3 billion has poured into these funds in recent months, including a streak of 55 consecutive days of net positive inflows.
This sustained buying pressure is directly impacting the market’s available liquidity. On-chain metrics confirm that XRP reserves held on centralized exchanges have plummeted to a seven-year low of just 1.7 billion tokens. Both investors and ETF providers are withdrawing coins from trading platforms in large volumes, drastically reducing the immediate sell-side supply.
Technical Hurdles and Short-Term Risks
As of Wednesday, XRP is trading near $1.89, remaining below the crucial $2.00 threshold. Despite a favorable news backdrop, bulls have so far been unable to reclaim this level. From a chart perspective, the asset has entered a consolidation phase that analysts warn could induce further selling pressure in the near term. The formation of an “Ending Diagonal” pattern suggests a potential pullback to test support around $1.76 before a sustainable base can be established.
Should investors sell immediately? Or is it worth buying XRP?
For traders, the short-term outlook carries risk until that $1.76 support level is either successfully tested or definitively holds.
Regulatory Clarity Fuels Operational Momentum
Beyond ETF flows, XRP’s long-term case is bolstered by significant operational progress. The conclusion of the multi-year legal battle with the SEC in the summer of 2025 has provided substantial regulatory clarity in the United States. Ripple is capitalizing on this environment with an aggressive expansion strategy:
* European Expansion: Securing an e-money license from the UK’s Financial Conduct Authority (FCA) strengthens its European presence.
* Enterprise Integration: Following the acquisition of GTreasury, Ripple’s technology is seeing deeper integration into traditional corporate treasury management systems.
* Ecosystem Growth: The launch of its native stablecoin, RLUSD, is driving increased activity and utility on the XRP Ledger.
Looking beyond immediate price action, the medium-term picture appears fundamentally supportive. The powerful combination of coins exiting exchanges and bullish forecasts from asset managers like 21Shares—which has issued a $2.45 price target for the current year—points toward a potential re-rating of the asset’s value.
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