XRP ETF Falls 5% but Sees Net Inflows—Is It a Dip-Buying Signal?

▲ XRP (XRP, ETF/ChatGPT-generated image ©

The price of XRP (XRP, Ripple) hovered around the $1.40 level while related exchange-traded funds plunged about 5% in a single day, yet fund flows shifted to net inflows, revealing a subtle divergence.

According to investment outlet Trading News on February 27 (local time), the XRPI ETF (NASDAQ: XRPI) closed at $7.92, down 4.92% on the day, while the XRPR ETF (BATS: XRPR) fell 5.32% to $11.39. Both products are currently down more than 60% from their 52-week highs. The underlying asset, XRP, has been trading in the $1.39–$1.43 range and is attempting a rebound after hitting a weekly low of $1.31. Although it has declined about 35% over the past three months, it remains roughly 29% above its early-February low of $1.121.

Despite the price weakness, capital flows into U.S. spot XRP ETFs have improved. Over two days starting February 24, approximately $6.13 million in net inflows were recorded, breaking a stagnant trend. Total net assets of U.S. spot XRP ETFs stand at about $1.06 billion, equivalent to roughly 1.19% of circulating supply. Cumulative net inflows since launch total around $1.24 billion. While not a large-scale influx, it is notable that inflows resumed in lower price ranges after a correction of more than 32% from earlier in the month.

In the derivatives market, leverage liquidations are evident. XRP futures open interest has shrunk to about $2.24 billion, down roughly 80% from the July peak of $10.94 billion last year. This suggests excessive leverage has been largely flushed out, reducing the risk of sharp long liquidations but also limiting the potential momentum for a short squeeze. Technically, $1.40 serves as the first line of defense, and a break below $1.31 could lead to a retest of the $1.25 zone. Resistance is seen at $1.54, followed by $1.63 where the 50-day exponential moving average sits. The daily MACD has crossed above the signal line but remains below the zero line, while the RSI hovers around 44, indicating an early stage of exiting bearish territory.

Infrastructure and policy variables also form part of the backdrop. The RLUSD stablecoin initiative based on the XRP Ledger and the introduction of a permissioned DEX for institutions are viewed as efforts to expand into payments and tokenization. At the same time, discussions surrounding the U.S. crypto market structure bill, the CLARITY Act, and the Securities and Exchange Commission’s review schedule for the T. Rowe Price Active Crypto ETF keep policy risk as a constant factor. Regulatory progress would be favorable for ETF expansion, but adverse decisions could exert immediate pressure on related products including XRPI and XRPR.

In summary, ETF funds have modestly shifted to net inflows, and much of the leveraged positioning in derivatives has been cleared. If XRP defends the $1.31–$1.40 support range and breaks above $1.54, ETF prices may recover part of their recent losses. Conversely, if XRP closes below $1.31 on a daily basis and ETF flows revert to net outflows, the correction phase could be prolonged.

Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from its use. The content should be interpreted solely for informational purposes.