The highly anticipated launch of the XRP spot ETF on Nasdaq was expected to be a historic moment. However, the token's price unexpectedly plummeted by 8% in the hours following the listing. This sharp correction caught investors off guard, revealing underestimated market dynamics such as massive liquidity, insufficient volumes, and limited impact of institutional flows on order books.
The first-day figures spoke for themselves: $245 million in net inflows and nearly $60 million in trading volume. On paper, these amounts seem substantial. In reality, they represent just a drop in the ocean compared to XRP ‘s colossal market capitalization, established at $138 billion.
To generate genuine buying pressure capable of moving the price, analysts estimate that inflows ten to fifteen times higher would have been needed, between $3 and $5 billion in a single session. At this level, each billion injected could theoretically trigger a 15 to 20 cent increase. This is the necessary condition to break through major technical resistance levels.
The main problem lies in the very structure of ETFs. Unlike direct purchases on trading platforms, ETF flows don’t systematically translate into immediate transactions on the public order book. Issuers can use pre-existing stocks or trade via OTC desks, thus diluting the impact on price action.
XRP faces a significant obstacle: Exceptionally high liquidity levels. Approximately 2.4 billion tokens are available for sale on major platforms, representing a value of around $5 billion. Added to this are $5 to $12 billion in additional liquidity held by OTC desks. This market depth explains why the initial $245 million inflows had no significant effect. Large institutions favor over-the-counter transactions to accumulate their positions without driving up the spot price. They pay a 5 to 15% premium to preserve anonymity and avoid slippage.
This phenomenon gradually reduces available supply in the long term, creating conditions for future compression. In the short term, the absence of direct impact on exchanges explains the disconnect between ETF flows and price movement, encouraging traders to take profits and thus amplifying the correction. The current situation resembles more of a distribution phase than the start of a bull run. Trading volumes remain too low to absorb selling pressure from long-term holders.
The critical threshold at $2.68 is the key to the next rally. This level corresponds to a former high, an accumulation of sell orders acting as a psychological ceiling. To break through it, XRP will require a powerful catalyst, such as the launch of several additional ETFs, capable of generating daily inflows of $1 to $3 billion and propelling the price by 40 to 50 cents, or even creating a parabolic rally beyond $5 billion, attracting momentum algorithms and retail traders.
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