XRP’s price behavior over recent months has highlighted a growing disconnect between institutional activity and public market trading.
While exchange-traded products linked to XRP have attracted substantial capital, that demand has not translated into higher spot prices, largely due to where and how transactions are taking place.
Market analysts say the explanation lies in the mechanics of price discovery rather than a lack of interest.
Public markets, not ETFs, set the price
XRP’s market price is determined on centralized exchanges, not through ETF transactions. Much of the recent ETF-related buying has occurred through over-the-counter channels, where large blocks of XRP can change hands without affecting order books.
As a result, ETF inflows have increased ownership exposure without creating visible buying pressure on exchanges. At the same time, XRP has faced consistent selling activity in public markets, preventing upward price movement.
Analyst Zach Rector noted that when institutional demand remains off-exchange, it can coexist with flat or declining prices on trading platforms where retail activity dominates.
Selling pressure has matched institutional demand
Data from November shows that exchange-based selling nearly matched ETF-related inflows during the same period. While funds flowed into XRP-linked investment products, a similar value of XRP was sold on centralized exchanges as holders converted positions into cash or stablecoins.
This dynamic effectively neutralized upward momentum. According to Rector, price movement typically accelerates only when institutional flows begin interacting directly with exchange liquidity rather than remaining isolated in private markets.
XRP’s volatility history suggests asymmetric moves
Despite recent stagnation, historical data indicates that XRP remains capable of sharp revaluations when conditions shift. In previous periods, relatively modest changes in net demand resulted in large swings in market capitalization.
Rector pointed out that XRP has experienced both rapid expansions and contractions within short time frames, depending on whether flows favored accumulation or distribution. This pattern suggests that once selling pressure eases, price adjustments can happen quickly.
Downside scenarios seen as limited by liquidity
From a downside perspective, Rector argued that current market structure makes a deep retracement unlikely without an external shock. Liquidity conditions have improved, and long-term holders appear willing to accumulate during pullbacks rather than exit positions.
He added that buying interest is already visible near established support zones, creating friction against further declines. While short-term volatility remains possible, sustained moves toward previous cycle lows would require a significant deterioration in market conditions.
Market focus remains on flow migration
According to analysts, the key variable to watch is whether ETF-related demand begins flowing into exchange markets. If that shift occurs, the balance between supply and demand would change materially, potentially altering XRP’s price trajectory.
Until then, XRP’s price may continue to lag headlines, reflecting the separation between institutional positioning and retail-driven price discovery.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
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