XRP is currently navigating turbulent waters as its price hovers near the critical $2.00 support level. In the latest trading session, the digital asset experienced a decline of 1.35%, as traders closely monitor this pivotal threshold.
Since the launch of XRP spot exchange-traded funds (ETFs) on November 13, the market has witnessed an impressive influx of investment. These ETFs have recorded 30 consecutive days of inflows without a single day of net redemptions, accumulating nearly $975 million, with total net assets reaching approximately $1.18 billion.
This remarkable success stands in stark contrast to similar products in the crypto space, such as Bitcoin and Ether ETFs, which have faced several days of outflows during the same period. Data from SoSoValue illustrates the steady demand, confirming that fresh capital has continuously entered XRP ETFs since their debut, indicating a preference among investors for long-term allocation over speculative flipping.
The resilience of XRP ETFs suggests that demand is being driven by specific asset factors rather than general market sentiment. While Bitcoin ETFs often mirror broader liquidity trends, XRP’s appeal seems more directed at investors seeking a unique position in the crypto landscape.
Technical Analysis Signals Risk Ahead
However, not all indicators are positive. Technical analysis reveals concerning patterns, particularly as XRP’s three-day EMA ribbon has flipped bearish. The most recent chart assessments highlight that price trading below this ribbon has historically led to significant downturns, ranging from 27% to 66% during previous cycles.
Historical data shows that each previous occurrence led to substantial multi-month declines. Therefore, as XRP currently navigates this bearish technical setup, there are growing concerns that a similar fate could await. The persistent bearish positioning of the EMA ribbon raises the stakes for traders, amplifying the urgency of maintaining the $2.00 support.
Demand Dynamics and Supply Implications
Beyond the price action, the inflows into XRP ETFs are notably straining the available supply of the asset on exchanges. As these inflows remove XRP from circulation, the tightening of supply creates a dynamic that could enhance price volatility in response to demand shifts.
The recent regulatory clarity surrounding XRP has facilitated easier institutional entry into this asset class. Spot XRP ETFs offer traditional investors a secure and regulated pathway into the cryptocurrency arena, effectively changing how XRP is perceived in conventional financial sectors.
Despite the exciting developments, hourly charts suggest that buyers are currently struggling to regain momentum. Should this weakness persist, it could lead XRP to test the next downside target around $1.98. A breach of the $2.00 support level may intensify selling pressure as the month draws to a close. Maintaining this threshold is crucial, particularly in light of the daily chart structure that underlines the weight of this psychological level.
As of December 12, the robust performance of XRP spot ETFs, boasting approximately $1.18 billion in total net assets, continues to attract investor interest. However, traders would be wise to stay vigilant, as both market dynamics and technical indicators paint a complex picture for XRP’s future.
