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▲ Ripple (XRP) ©Go Da-sol
XRP is facing its biggest supply-demand test ahead of October, currently at $1.51. With the impending release of Ripple's 1 billion XRP from escrow and U.S. spot ETFs having attracted $1.79 billion since their launch, the ability to maintain support at $1.48 has emerged as a watershed moment for re-challenging $1.60 and $1.66.
According to investment specialized media TradingNews on September 30 (local time), XRP was trading at $1.51, down 9.0% from its September 23 high of $1.66, but maintained its support range of $1.48-$1.50. The U.S. August Core Personal Consumption Expenditures (PCE) price index rose 3.0% year-over-year, falling below the expected 3.3%, which lowered the Federal Reserve's (Fed) possibility of an interest rate hike in October from 47% to 37%. XRP started at $1.38 on September 1, rose to $1.66 by the 23rd, and is still 51% higher compared to around $1 at the beginning of August.
Institutional supply and demand remained robust despite price adjustments. Seven U.S. Spot XRP ETFs have recorded cumulative net inflows of $1.79 billion since their launch and collectively hold 1.18 billion XRP. This accounts for 1.18% of the total supply. Net inflows in September amounted to $121.4 million, marking 11 consecutive weeks of net inflows until September 25. However, buying momentum paused on the 29th as no new funds entered. The media analyzed that this correction was due to price declines rather than investor exodus, given that ETFs continued to purchase additional XRP even as the price fell from $1.66.
The market's immediate attention is on Ripple's escrow release on October 1. Up to 1 billion XRP could be unlocked, a volume close to the 1.18 billion XRP held by the seven U.S. Spot XRP ETFs. However, Ripple typically re-locks 600-800 million XRP of the monthly released amount into escrow, limiting the actual usable amount for operations, partnerships, and sales to 200-400 million XRP. An escrow release does not immediately imply market selling. In fact, on September 1, 1 billion XRP was released, but the price did not fall afterward; instead, it rose to $1.66 by the 23rd of the same month.
The expansion of the Ripple ecosystem was also cited as a variable for long-term demand. The supply of Ripple's stablecoin, RippleUSD (RLUSD), increased to $2.41 billion, with $1.07 billion of that issued on the XRP Ledger. RLUSD accounts for 88% of the total stablecoin liquidity on the XRP Ledger. Ripple has partnered with Brazil's CSD BR to integrate the XRP Ledger into financial infrastructure handling assets worth 22 trillion Brazilian Reals, and network payment volume also surged by 521% in August. However, the media noted that while increased use of RLUSD could boost network activity, stablecoin growth does not necessarily translate directly into XRP value.
Technically, $1.48 is the key defense line. If XRP maintains this, $1.60 is presented as the first major resistance after $1.52, and a breakthrough of $1.60 on a daily closing basis would set the September high of $1.66 and $1.70 as the next targets. These are approximately 6.0%, 9.9%, and 12.6% higher than the current $1.51, respectively. Conversely, a close below $1.48 opens up the possibility of a correction to $1.38, and then to $1.3335. TradingNews predicted that if $1.48 is maintained even after the escrow release and ETF fund inflows strengthen again, there is a possibility of recovering $1.60 in October, followed by a retest of $1.66.
*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*
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