XRP: ETF Boost Fades as Leverage Declines to $450 Million

In recent times, despite a brief surge in ETF inflows, Ripple’s XRP is facing downward pressure. Key market participants are reducing their exposure, and Open Interest (OI) is sharply declining. This notable shift in sentiment may be worth monitoring as the market prepares for its next move.

Key Takeaways

XRP has seen a reduction in ETF inflows following an initial surge.
Long-term holders are decreasing their XRP holdings, signaling potential profit-taking.
Open Interest in derivatives has fallen to $450 million, suggesting traders are less confident.
The overall market sentiment may lead to increased price volatility.

XRP

Following a burst of enthusiasm in ETF investments, XRP’s upward momentum appears to be slowing. Institutional involvement has diminished, and long-term holders are cashing out. Meanwhile, a significant drop in derivatives indicates a lack of confidence among traders.

ETF Inflows Slow

Initial ETF inflows propelled Total Net Assets to approximately $1.24 billion, but recent data reveals that this growth is stagnating. Daily contributions have significantly reduced, with some trading days seeing negligible new capital entering the market.

While XRP's price remains stable, accumulation activity has noticeably slowed down.

XRP

Source: SoSoValue

Current asset levels remain high, indicating that there isn’t a complete exit from the market. However, this trend indicates that the initial wave of ETF-driven interest is diminishing.

AMBCrypto previously reported that despite these inflows, XRP's value remained relatively unchanged, as institutions were quietly accumulating positions. The recent decline suggests this support is depleting.

Long-Term Holders Are Cashing Out

According to Glassnode’s HODL Waves metrics, wallets holding XRP for 2-3 years—typically seen as stable investors—are reducing their share of the total supply.

This segment fell from 14.26% in late November to about 5.66% by late December, marking a substantial decrease in just one month. This trend indicates that long-term holders may be taking profits or stepping away from the market.

XRP

Source: Glassnode

As stable investors exit alongside declining inflows, the structural support for XRP becomes weaker, leaving the price more susceptible to fluctuations.

Derivatives Market Retreat

XRP’s Open Interest on Binance has plummeted to around $450 million, marking its lowest figure since November 2024. This decline signifies widespread position closures, particularly among leveraged long traders.

Source: CryptoQuant

A rapid reduction in Open Interest usually implies that traders are opting to step back rather than stay in the market for potential gains. With less leverage, speculation decreases, further reflecting waning confidence.

Until trader participation rebounds, XRP's price movements may continue to be volatile and reactive.

Conclusion

In summary, the combination of slowing ETF inflows, decreasing long-term holder participation, and declining Open Interest puts pressure on XRP's market stability. Investors should watch these trends closely as they could significantly influence price fluctuations in the near future.