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XRP trades near $2.04 after climbing more than 12% in the last month, yet the token struggles to reclaim strong momentum. The asset slipped through the past week and lost close to 8% while traders weighed a rare combination of institutional strength and short-term weakness.
With a market capitalization near $125 billion and daily volume above $3.3 billion, XRP keeps its position as one of the most liquid crypto assets. The market now watches the psychological $2 support level as heavy inflows clash ih rising short exposure and fading retail conviction.
Sentiment Breakdown Creates a Contrarian Setup
Market sentiment around XRP sits inside one of the deepest fear zones since October. Santiment reports that sentiment prints the same level of panic that preceded a sharp twenty-two percent rebound on November 21. RSI sits near 45 and the SAR indicator keeps flipping into bearish territory.
Source: X
Traders feel trapped between disbelief and fatigue after a two-month decline of thirty-one percent. The present slide shows structural weakness rather than blind panic, which means any reversal must appear through rising volume and inflow recovery rather than pure emotion. Traders hunt for signs that shorts may reach exhaustion as they did during past rebounds.
Institutions Accumulate While Retail Steps Back
Institutional appetite continues to grow even as retail traders exit. U.S. spot XRP ETFs attracted $906 million in net inflows since launch, with not a single day of outflows. The flagship XRPC ETF now holds $336 million, which places it above every competing fund.
Franklin Templeton now lists XRP as a top-four holding in its regulated multi-asset crypto product. These flows form a clear divergence: Institutional portfolios build long-horizon positions while retail traders short the asset. The setup shows a market where deep pockets accumulate quietly below the surface, waiting for fear to drain out of the system.
Ripple’s $4B Expansion Reshapes Global Finance
Ripple pushed aggressively into global finance through a $4 billion acquisition wave across GTreasury, Rail, Palisade, and Ripple Prime. The company now holds strategic control over treasury management, liquidity services, payments, and institutional crypto infrastructure. Regulatory traction strengthens the expansion. Approvals in Singapore and the UAE, plus FSRA authorization of the RLUSD stablecoin, anchor Ripple inside the regulated payments ecosystem. Ripple also reached a major U.S. milestone when Bitnomial launched the first CFTC-approved XRP spot product. This move places XRP beside commodities such as Treasuries on a federally regulated exchange. Markets have not priced this transformation yet, leaving a wide gap between Ripple’s operational dominance and XRP’s market performance.
On-Chain Data Reveals a Structural Split
The XRP Ledger shows its highest transaction velocity of the year at 0.0324, marking strong network usage. Open interest climbed to $3.85 billion while funding rates stayed negative, which confirms heavy short positioning. A regional concentration also emerges: Upbit holds more than six billion XRP, far above Binance at 2.6 billion. The imbalance introduces the risk of region-based liquidation waves during volatility spikes. Liquidity remains deep and participation strong, yet direction stays capped by pressure from leveraged traders.
Long-Term Holders Rotate as Whales Step In
Long-term holder dormancy dropped ninety-one percent since mid-November, signaling that older coins rarely move. At the same time, cohorts that held XRP for six months to three years trimmed positions and locked in profits. Institutions absorbed much of that volume through ETF demand, which removed nearly half a percent of total supply from circulation as ETFs crossed one billion dollars in assets under management. Whales keep buying while early holders reduce exposure. This rotation delays any strong recovery but builds the foundation for a future supply squeeze once distribution slows.
XRP now enters a rare moment where institutional strength outweighs retail fear, setting the stage for a potential shift once the market resolves its internal pressure.
