Ripple's XRP Faces Critical Juncture: Will Billions in Investment Products Turn the Tide?

Ripple locked 700 million $XRP into escrow through three separate transactions: 500 million, 100 million, and another 100 million tokens.

The combined value exceeded $907 million based on prevailing market prices. This move continued Ripple’s long-established supply management framework and reduced the amount of $XRP immediately available for circulation.

However, the market reaction remained muted because investors had already become familiar with these recurring escrow operations. Instead, traders focused on whether tightening available supply could eventually support valuation.

Even so, $XRP continued trading lower, suggesting that broader market sentiment carried greater influence than the escrow activity itself during this period.

Source: Whale Alert/X

ETF demand keeps building quietly

Institutional interest remained one of the strongest developments surrounding $XRP.

$XRP ETFs attracted an additional $4.13 million in inflows, pushing total assets under management to $1.11 billion. This increase indicated that professional investors continued accumulating exposure despite ongoing weakness across the chart.

Unlike short-term traders, ETF participants generally target longer investment horizons, making their activity an important sentiment gauge. However, the pace of inflows remained relatively modest compared to $XRP’s overall market capitalization.

As a result, the demand signal stayed constructive without generating immediate upside pressure. Nevertheless, the steady rise in ETF holdings suggested that institutional conviction had not disappeared despite recent declines.

Can $XRP defend its final support?

$XRP remained trapped inside a descending channel that had guided price lower since mid-May. At press time, the asset traded near $1.26 after losing the critical $1.30 support level.

Meanwhile, resistance remained positioned around $1.365, while a broader recovery would require a move toward $1.50. The channel structure continued producing lower highs and lower lows, reinforcing bearish control throughout the period.

Selling pressure remained evident through the Relative Strength Index, which fell to 32.33. The indicator approached oversold territory and reflected persistent weakness across recent sessions.

However, price had also approached the lower boundary of the channel, an area where reactions often emerge.

If buyers regain control and reclaim $1.30, $XRP could challenge higher resistance zones. Otherwise, continued weakness would leave the structure vulnerable to another leg lower.

Source: TradingView

$XRP derivatives data reveals a market divide

Derivatives traders delivered mixed signals. At the time of writing, Open Interest (OI) increased 2.12% and reached $985.63 million, indicating that fresh positions entered the market despite declining prices. This pattern suggested that participants continued actively positioning for future volatility.

However, Funding Rates collapsed 78.08% to 0.002696, revealing a sharp decline in bullish conviction. The combination created an unusual setup: rising Open Interest signaled growing participation, while a decline in Funding Rates showed that traders were no longer paying steep premiums to maintain long positions.

As a result, the derivatives market reflected uncertainty rather than strong directional confidence. This divergence suggested that traders expected movement ahead but remained divided on $XRP’s next major move.

Source: CryptoQuant

Is institutional demand enough?

ETF inflows continued supporting the long-term investment narrative, while Ripple’s escrow actions reinforced supply discipline.

However, $XRP remained below key support and stayed trapped inside a declining channel. RSI reflected persistent weakness, and derivatives traders showed increasing caution despite rising participation.

If institutional demand continues to grow, it could help stabilize sentiment and support a recovery. Otherwise, the current technical structure would likely keep pressure on $XRP until buyers reclaimed lost support levels.

Final Summary

ETF holdings kept growing even as $XRP remained trapped below key resistance.

Rising Open Interest contrasted with falling Funding Rates and weaker sentiment.