A striking divergence is unfolding in the XRP market. While the digital asset’s price has broken below key technical levels, shedding approximately 9% over the past week, its newly launched exchange-traded funds (ETFs) are experiencing unprecedented demand. This contrast raises a critical question: why is institutional capital flowing in as the spot price declines?
Macroeconomic Headwinds Intensify Selling Pressure
External factors are contributing significantly to the current sell-off. Economists widely anticipate a 25-basis-point interest rate hike from the Bank of Japan on Friday, December 19th. Concurrently, yields on 10-year Japanese Government Bonds are approaching the 18-year high seen the prior week, signaling a potential unwinding of yen carry trades. XRP has historically demonstrated an inverse correlation to these yields.
Further pressure stems from regulatory delays in the United States. The anticipated markup of the comprehensive crypto market structure legislation, expected this week, has now been postponed to early 2026. This represents a setback for an industry seeking regulatory clarity. XRP has shown sensitivity to such developments before, notably rallying nearly 15% on July 17th following the bill’s passage in the House of Representatives.
Technical Breakdown Signals Bearish Shift
During the latest trading session, XRP fell from just under $2.00 to a daily low near $1.87. This move constituted a decisive break below the $1.93 support zone, which had held for weeks. Trading volume spiked to 246% above the 24-hour average, suggesting broad participation from larger market players.
Technical indicators paint a uniformly bearish picture. The asset is now trading below both its 50-day and 200-day moving averages. The next significant support levels are found at $1.82 (the low from November 21) and $1.75. The former support at $1.93 has now flipped into a resistance level.
Spot ETFs Defy Market Sentiment with Record Inflows
In stark opposition to the weak price action, the four spot XRP ETFs have achieved a remarkable milestone. According to data from SoSoValue, these funds have attracted net inflows for 30 consecutive trading days since their launch on November 13, surpassing $1 billion in cumulative assets without a single day of outflows. This performance stands in sharp contrast to Bitcoin ETFs, which saw outflows of $3.4 billion, and Ethereum ETFs, with outflows of $1.3 billion, over the same period.
Should investors sell immediately? Or is it worth buying XRP?
The distribution of inflows among the funds is as follows:
* Canary Capital XRP ETF: $376.5 million
* Grayscale XRP ETF: $219.8 million
* Bitwise XRP ETF: $212.6 million
* Franklin Templeton XRP ETF: $193 million
Notably, the XRP ETF suite reached the $1 billion threshold faster than Ethereum ETFs, which required 96 trading days to achieve the same—and without products from heavyweight issuers like BlackRock or Fidelity.
Ripple Advances Infrastructure Amid Market Weakness
Parallel to the price decline, Ripple Labs continues to expand its operational infrastructure. On December 12th, the company received preliminary approval from the U.S. Office of the Comptroller of the Currency (OCC) for the Ripple National Trust Bank in New York. This entity is slated to manage, among other things, the reserves for the RLUSD stablecoin.
RLUSD, launched in December 2024, has already grown to a market capitalization of $1.3 billion. Ripple plans to expand its presence onto Ethereum Layer-2 networks in 2026. In a further development for institutional access, the CME Group has announced the upcoming launch of XRP futures contracts.
Conditions Ripe for a Technical Rebound?
Recent liquidity analysis indicates that most sell-side liquidity zones below the current price have been cleared. Simultaneously, funding rates across major exchanges have turned negative, a classic sign of elevated short positioning. Historically, such one-sided market conditions increase the probability of a technical counter-move or short squeeze.
A sustained break below $1.82 would confirm the bearish structure. However, a reclaim of the $1.93 level on declining volume could signal waning selling pressure. The coming days are likely to provide clearer direction, particularly following the Bank of Japan’s interest rate decision on December 19th.
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