XRP ETF Flows Reveal Negative Funding

What to Know:

• XRP ETFs experienced a significant outflow of funds last week, primarily on Thursday, impacting overall net inflows.
• This occurred amid broader market volatility influenced by US Federal Reserve announcements and geopolitical tensions in the Middle East.
• The outflows contributed to a decline in XRP’s price, highlighting the token’s sensitivity to ETF performance and external economic factors.

XRP ETFs, after a strong initial run marked by substantial inflows, faced a challenging week. A large outflow, primarily on one day, offset earlier gains, pushing the week into negative territory. This development coincided with broader market instability, underscoring the interconnectedness of XRP’s performance with both ETF flows and macroeconomic events.

Weekly ETF Performance

The first three days of last week saw modest but positive inflows into XRP ETFs, totaling $7.76 million on Monday, $9.16 million on Tuesday, and $6.95 million on Wednesday. However, Thursday witnessed a sharp reversal as broader cryptocurrency markets reacted negatively to the US Federal Reserve’s decision to hold off on interest rate cuts, coupled with increased geopolitical uncertainty due to US naval deployments in the Middle East. XRP ETFs experienced a substantial outflow of $92.92 million, according to data from SoSoValue.

Friday brought a partial recovery with inflows of $16.79 million, but it was insufficient to offset the massive outflow from the previous day. For the week, XRP ETFs collectively lost $52.26 million, marking their worst week since the inception of the first XRP fund in mid-November. The cumulative net inflows decreased from a peak of $1.26 billion on Wednesday to $1.18 billion by Friday’s close.

Impact on XRP Price

The significant ETF outflows, combined with the overall downturn in the crypto market, put downward pressure on XRP’s price. The token declined by over 11% from the previous weekend, reaching a low of $1.70 earlier in the week. This level represented XRP’s lowest point since October, when it briefly dipped below $1.60 on various exchanges.

Analyst Outlook

Despite the recent price drop, some analysts remain optimistic about XRP’s potential for a rebound. Ali Martinez, for example, suggested that a recovery is likely if the token can maintain support above the $1.70 level. Martinez pointed to the TD Sequential indicator, which has flashed a buy signal, as further support for a potential upward movement.

Broader Market Context

The fluctuations in XRP ETF flows and the corresponding price movements highlight the increasing integration of XRP into the broader financial market structure. The performance of these ETFs is influenced not only by sentiment surrounding Ripple and its ongoing legal battles but also by macroeconomic factors and geopolitical events. This interconnectedness underscores the importance of monitoring both crypto-specific and global economic indicators for those trading XRP.

Conclusion

Last week’s outflows from XRP ETFs and the subsequent price decline serve as a reminder of the volatility inherent in the cryptocurrency market. While the long-term prospects for XRP may remain positive, short-term performance is subject to a range of factors, including ETF flows, regulatory developments, and broader market sentiment. Investors should remain vigilant and consider these factors when making investment decisions.

Related: XRP Signals Breach: What’s Next?

Source: Original article