XRP ETF Plunged… Why Is Institutional Capital Still Flowing In?

▲ XRP/ChatGPT generated image ©

Although the XRP (Ripple) ETF market recorded a double-digit plunge in just one day, institutional funds continue to flow in, drawing market attention to the U.S. cryptocurrency market structure bill, the CLARITY Act.

According to the investment media TradingNews on May 15 (local time), XRPI, a Nasdaq-listed XRP ETF, closed at $8.02, down 5.54% on the day. Intraday prices fluctuated between $7.99 and $8.15, and as of year-to-date, it has fallen approximately 66% from its peak. The Rex-Osprey XRP ETF (XRPR) fell 5.64% to $11.71, while the Bitwise XRP ETF dropped to $16.07 and the Canary Capital XRP ETF to $15.24. In particular, leveraged products XRPT, UXRP, and XXRP plunged by over 11% in a single day, indicating increased volatility.

However, institutional capital flows remained robust. The 21Shares XRP ETF (TOXR) recorded a net inflow of $1,123,040 on May 13. The media emphasized the significance of institutional capital continuing to enter the ETF market despite price corrections, rather than the sheer volume itself. The total cumulative net inflow into XRP ETFs increased to $1.37 billion, with daily new inflows alone reaching $19 million. The total net asset value of all ETFs expanded to an average of $1.25 billion.

Investor sentiment also remains alive in the derivatives market. XRP futures open interest increased from $2.9 billion to $3.09 billion in one day. According to Glassnode data, the percentage of XRP addresses in profit also rose from 63% to 65%. The media assessed that while a simultaneous increase in open interest and weakness in spot prices could heighten liquidation risks, the current trend itself indicates that bullish sentiment is being maintained.

The biggest market variable is the progress of the CLARITY Act. The U.S. Senate Banking Committee passed the bill by a vote of 15-9, and the bill includes provisions classifying XRP as a digital commodity, similar to Bitcoin and Ethereum. The media assessed this as one of the most significant regulatory changes in XRP's history. However, despite expectations for the bill's passage, XRP failed to break through the $1.50 resistance level, marking its fourth pullback this year. The current XRP price is trading around $1.43, with the 50-day Exponential Moving Average (EMA) near $1.42 presented as a key support level.

The media analyzed that the very fact that Nasdaq listed XRP-based ETF products is a signal of institutional market confidence. At the same time, it diagnosed that in the short term, surging U.S. Treasury yields and a strong dollar are pressuring the overall cryptocurrency market. A forecast was also presented that if XRP breaks above $1.50 in the future, it could open up upside potential to the $1.70 and $2.00 ranges. Conversely, the possibility of retesting the $1.30 and $1.25 ranges was mentioned if the support level breaks.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*