XRP News: Institutions quietly sell off, millions withdraw from ETP suggesting signs of a crash?

Last week, due to the overall uncertainty in the Crypto Assets market, investors withdrew millions of dollars from the XRP ETP. According to CoinShares, the total outflow of funds from Crypto Assets ETPs reached $2 billion, marking the largest single-week outflow record since February, with XRP products being severely impacted. CoinShares believes that the uncertainty in monetary policy and the dumping by native Crypto Assets Whales are the main reasons for the recent negative sentiment.

$2 billion withdrawal tide, XRP ETP is the first to be impacted

According to CoinShares, the total outflow of funds from cryptocurrency ETPs reached $2 billion, marking the largest weekly outflow since February. The news surrounding XRP has become the market focus as XRP products have been severely impacted. Bitcoin and Ethereum ETPs were the first to experience fund outflows, with redemption amounts reaching $1.4 billion and $689 million, respectively. Although CoinShares' report did not specifically disclose the outflow amount for XRP ETPs, as the third-largest crypto asset, XRP products are also facing significant redemption pressure.

CoinShares Chief Researcher James Butterfill attributes the capital outflow to two core factors. The first is the uncertainty of monetary policy. Following the recent Federal Open Market Committee (FOMC) meeting, Federal Reserve Chairman Powell pointed out that a third rate cut in December is not a foregone conclusion. This prompted analysts to revise their expectations and triggered a broader market adjustment.

The market originally expected the Federal Reserve to cut interest rates three times in 2025, providing liquidity support for risk assets. However, Powell's hawkish statements shattered this expectation, forcing investors to reassess the risk-reward ratio of crypto assets. In an environment of increasing uncertainty, institutional investors tend to reduce their exposure to high-volatility assets, prioritizing capital protection over pursuing high returns.

Secondly, there is the selling off by native crypto assets whales. On-chain data shows that multiple addresses holding large amounts of XRP have significantly reduced their positions in the past few weeks. These whales often have a deeper understanding of the market or insider information, and their selling behavior has triggered a chain reaction, causing regular investors to start following suit, creating a self-reinforcing downward spiral.

Crypto Assets ETP Fund Outflow Distribution

United States: accounting for 97% of total capital outflows, reaching 1.97 billion USD

Switzerland: Outflow of 39.9 million USD

Sweden: Outflow of 21.3 million USD

Hong Kong, Canada, Australia: Total outflow of 23.9 million USD

The dominant capital outflow from the U.S. market indicates that institutional investors are withdrawing from Crypto Assets on a large scale. These institutional investors are often regarded as “smart money,” and their exit typically signals that the market may face a deeper adjustment. For XRP news, this shift in institutional behavior is the most concerning risk signal.

XRP weekly drop of 11%, descending triangle suggests breakdown

(Source: Trading View)

XRP has fallen by 3.6% in the past 24 hours, dropping below the $2.20 mark, with a cumulative decline of 11% this week. The recent descending triangle formation suggests a potential bearish breakout, raising concerns that the pullback may not be over yet. The descending triangle is a classic bearish continuation pattern in technical analysis, characterized by decreasing highs and lows consolidating horizontally near a support level.

The current price is hovering above the support level of $2.10 on the 4-hour chart, which is becoming a key defense line. If XRP breaks below $2.10, there is a risk of dropping to $1.77—a potential decrease of 16% from the current level. This target price is based on the measurement rules of a descending triangle pattern: the height of the pattern plus the breakout point projected downward to derive the technical target.

Why is the support level of 2.10 dollars so crucial? From multiple technical perspectives, this price level is a convergence point of several factors. First, it serves as the support line for the lower boundary of the descending triangle, and a breach would confirm a bearish pattern. Second, in terms of volume distribution, there is a significant amount of historical trading records around 2.10 dollars, indicating that many investors' costs are concentrated in this range. Third, from a psychological standpoint, the 2 dollar mark holds significant symbolic meaning, and a breach could trigger panic selling.

From the perspective of trading volume analysis, if it breaks below 2.10 USD accompanied by increased volume, it will confirm the effectiveness of the breakdown, and the subsequent downward momentum will be stronger. Conversely, if the volume decreases when it breaks, it may only be a technical breakdown or a false breakdown, and the price could quickly recover lost ground. Traders should closely monitor the changes in trading volume at the time of the breakdown, as this will provide clearer directional guidance.

However, if XRP rebounds and breaks through the upper trend line of the triangle, the outlook will completely turn bullish. Although a descending triangle is a bearish pattern, it does not necessarily lead to a downward breakout. If the price breaks above the upper boundary trend line with increased trading volume, it will create a “failed bearish pattern,” and this reversal often triggers a more intense rally, as a large number of short sellers are forced to close their positions.

Institutional dumping or strategic reallocation

The core question raised by this XRP news is: Are institutional investors really bearish on XRP, or are they merely making strategic adjustments to their positions? Given the scale of the withdrawal in the millions of dollars, this is not retail behavior, but rather an institutional-level decision. Institutional investors typically do not easily change their positions due to short-term fluctuations; their exit is often based on a reassessment of fundamentals or market structure.

One possibility is that institutional investors have lost confidence in the long-term prospects of XRP. Although the lawsuit between Ripple and the SEC has concluded, there is still limited progress regarding the practical applications of XRP. While Ripple has established partnerships with hundreds of financial institutions through its cross-border payment network, there are still few cases of XRP being used on a large scale as a bridge currency. This slow adoption of applications may lead institutional investors to question the long-term value of XRP.

Another possibility is that institutional investors are making adjustments to their risk management. In the context of increasing macro uncertainty, institutions may temporarily reduce their exposure to all Crypto Assets, rather than just targeting XRP. In this case, the withdrawal of XRP is part of an overall risk-averse strategy, rather than a loss of confidence in XRP itself. Once the macro environment stabilizes, funds may flow back in.

The third possibility is that institutional investors are shifting from ETP products to other XRP investment tools. For example, buying spot XRP directly on exchanges or establishing positions through OTC large trades. Although ETP products offer convenience and regulatory protection, they also come with management fees and liquidity constraints. Mature institutional investors may choose more direct and cost-effective holding methods.

2.10 Dollar Life-and-Death Battle and Rebound Scenario

The current price is hovering above the support level of $2.10 on the 4-hour chart, and this level is becoming a key defense line. If XRP successfully holds above $2.10 and starts to rebound, the news of investors withdrawing millions of dollars from XRP ETP may gradually fade, and the XRP price prediction still suggests that once market panic subsides, the price may rebound.

The trigger conditions for a rebound scenario include: improvement in the macro environment, the Federal Reserve releasing clearer signals for interest rate cuts; significant positive developments in the fundamentals of XRP, such as large financial institutions announcing the use of XRP for cross-border payments; on the technical front, XRP breaking upward through the upper trend line of a descending triangle, accompanied by an increase in trading volume. Only when these conditions are met one by one can the price prediction for XRP shift from bearish to bullish.

If XRP bounces back and breaks through the upper trend line of the triangle, the outlook will completely turn bullish. The first target after the upward breakout is at $2.50, which is a key level where previous resistance turns into support. Further breakthroughs may challenge the psychological barrier of $3.00, or even retest the October high of $3.65. However, this optimistic scenario requires an overall increase in market risk appetite, as well as specific catalysts supporting XRP.

In a market where uncertainty still exists, investors need to remain cautious. The withdrawal of institutional funds and the descending triangle pattern are both clear bearish signals. Although this does not necessarily mean that XRP will crash, it does remind investors that the current risk-reward ratio has become unfavorable. For investors holding XRP, the $2.10 level is a key level to closely monitor; a drop below this will trigger a deeper adjustment. For investors on the sidelines, waiting for clearer reversal signals may be a more prudent strategy.

XRP Currently Facing a Dual Path

Bearish Scenario: If it breaks below the support of 2.10 USD, the next target is 1.77 USD, with a potential decline of 16%.

Bullish Scenario: If there is a breakout above the descending triangle, the target is $2.50-3.00, which needs to be confirmed by trading volume.

The ultimate impact of this XRP news depends on the price behavior in the coming days. The battle at $2.10 will determine whether XRP enters a deeper bear market adjustment or simply experiences a healthy correction within the bull market.