Institutional Capital Flows Defy XRP’s Price Weakness

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As the holiday period saw significant capital withdrawals from Bitcoin and Ethereum, XRP presented a striking contrast. Investment products tied to the digital asset recorded substantial inflows, suggesting institutional investors are strategically accumulating positions despite ongoing price pressure. This divergence between fund flows and market valuation offers fresh insight into professional investor sentiment as the year concludes.

Beyond price action, the actual availability of XRP tokens has become a topic of discussion. On-chain analytics reveal that exchange reserves have declined sharply over the past year, falling from four billion to under two billion units. This trend typically signals a long-term holding strategy among investors.

However, speculation about a potential "supply shock" has been tempered by industry experts. A validator within the XRP Ledger ecosystem clarified that, despite ETF purchases absorbing approximately one percent of the circulating supply, around 16 billion XRP remain readily liquid in the market. This indicates that overall market liquidity remains flexible, even as readily tradable supplies on exchanges tighten.

Contrarian Institutional Moves Stand Out

Recent weekly data highlights a clear institutional divide. While spot ETFs for market leaders Bitcoin and Ethereum experienced net outflows measuring in the hundreds of millions, XRP-focused investment vehicles attracted $64 million in new capital.

This counter-trend movement was partly driven by funds such as those offered by Franklin Templeton. The behavior suggests professional market participants are using the current price levels to build positions, displaying a stance independent of the broader caution prevailing in the cryptocurrency sector. Consequently, the Assets Under Management (AUM) for XRP ETFs have risen to approximately $1.24 billion.

Technical Analysis: A Precarious Support Level

Despite the inflow of institutional money, XRP's price struggles with key technical thresholds. The asset currently trades at $1.87, placing it just below a critical support zone at $1.90.

Technical indicators, including the Relative Strength Index (RSI), now signal deeply oversold conditions. Historically, such readings have often preceded sharp corrective rallies. Market analysts are closely watching the $1.90 level: a sustained recovery above it could pave the way for a move toward $2.50. Conversely, a firm establishment below this support risks a further pullback toward the $1.50 region.

Conclusion: A Pivotal Juncture

As 2025 draws to a close, XRP finds itself at a critical inflection point. The disconnect between institutional buying and weak price action reveals that "smart money" evidently sees potential where the broader market hesitates. For a sustained trend reversal, the asset must not only complete a technical bottoming formation but also, as noted by observers like Mike Novogratz, demonstrate its fundamental utility beyond pure speculation in the coming year.