Here Is Why XRP Could Be Facing a Critical Test as ETF Flows Suddenly Turn Negative

• Spot XRP ETFs have recorded two straight days of net outflows for the first time since March, raising concerns about institutional demand.
• XRP remains above the key $1 support level, but analysts warn a break lower could trigger a deeper correction.
• Falling exchange reserves and bullish technical indicators still suggest the long-term outlook may remain intact.

XRP has been one of the few bright spots in the crypto market when it comes to institutional demand.

While spot Bitcoin and Ethereum ETFs have struggled with persistent outflows in recent weeks, XRP investment products continued attracting fresh capital almost uninterrupted. That trend, however, may be starting to crack.

For the first time in months, spot XRP ETFs have posted consecutive days of net outflows, creating fresh uncertainty as the token hovers just above one of its most important price levels.

XRP ETF Demand Shows Its First Real Signs of Weakness

Institutional interest in XRP has been remarkably resilient.

Since Canary Capital introduced the first U.S. spot XRP ETF last November, several major asset managers, including Bitwise, Franklin Templeton, 21Shares, and Grayscale, have entered the market with their own products.

Together, those ETFs have accumulated nearly $1.5 billion in total net inflows, even as the broader crypto market experienced a prolonged downturn.

But over the past two trading sessions, something changed.

According to SoSoValue data, XRP ETFs recorded back-to-back days of net outflows for the first time since March. While two days don’t necessarily establish a long-term trend, the shift suggests that institutional investors may be becoming more cautious after months of steady accumulation.

That matters because ETF issuers typically adjust their holdings based on investor demand. If money continues flowing out of these products, additional XRP could be sold into the market, increasing short-term selling pressure.

The $1 Support Level Remains the Line in the Sand

Earlier this week, XRP briefly slipped toward the psychological $1 level, a price many traders have been watching closely.

Bears came close to pushing the token below that support for the first time since late 2024, but buyers quickly stepped in before the breakdown could gain momentum.

As a result, XRP has managed to recover and is currently trading around $1.11.

Still, technical analysts remain divided.

Crypto analyst Diana warned that if XRP falls below the $1.08 support area once again, the decline could accelerate toward roughly $0.87. On the other hand, maintaining strength above current levels could provide enough momentum for a recovery toward the $1.30 region.

For now, that leaves XRP sitting at an important crossroads.

Bullish Signals Continue to Build Behind the Scenes

Despite the recent ETF outflows, several on-chain and technical indicators continue pointing toward a more constructive long-term outlook.

One of the clearest signals comes from Binance.

The amount of XRP held on the exchange recently dropped to its lowest level in four months. Lower exchange balances often indicate fewer tokens are immediately available for sale, reducing potential selling pressure if demand begins to strengthen.

Another encouraging sign comes from veteran market analyst Ali Martinez.

According to Martinez, the Tom DeMark (TD) Sequential Indicator has generated a monthly buy signal for XRP. The same signal has also appeared across several major cryptocurrencies, including Bitcoin, Ethereum, and Solana.

On higher timeframes, these signals tend to carry significantly more weight than short-term trading indicators.

Martinez explained that when multiple large-cap cryptocurrencies flash simultaneous monthly buy signals, it often reflects seller exhaustion and increases the probability that the broader market is approaching a long-term bottom.

That doesn’t guarantee an immediate rally, of course. Markets rarely move in a straight line.

Still, while ETF flows have temporarily weakened, shrinking exchange reserves and improving long-term technical signals suggest XRP’s bigger picture may not be as bearish as recent headlines imply.

The next few trading sessions, especially whether XRP can continue defending the $1 support zone, could determine which narrative ultimately wins.

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