XRP Drops 18.3% in a Month, But Institutional Interest Grows

XRP has been experiencing a challenging period, with its price declining by 18.3% over the past month. This downturn has brought the asset's value down to $2.06, significantly below its peak of over $3.40. The market has seen subdued investor activity and reduced participation across both spot and derivatives markets.
Despite the decline, a CryptoQuant analyst known as EgyHash has highlighted a paradox in XRP's market behavior. While on-chain activity has decreased by 80% since December, the price has only dropped by about 35% from its peak. This is a milder correction compared to other assets like Ethereum, which has fallen roughly 60% over the same period. The decline in on-chain activity is mirrored in the futures market, where open interest has dropped by about 70% from its highs, and funding rates have occasionally turned negative.
One of the key indicators of XRP's resilience is the Estimated Leverage Ratio, which has also dropped significantly. This ratio gauges average user leverage by comparing open interest to coin reserves. Despite these indicators pointing to weakening momentum, the altcoin’s price has remained relatively stable. Additionally, the altcoin’s Exchange Reserve has continued to decline, reaching levels last observed in July 2023. Lower reserves typically suggest that fewer tokens are available for immediate sale, a factor that can help support prices during market downturns.
According to EgyHash, this trend, along with relatively stable pricing, could indicate growing long-term confidence in the asset. Institutional developments may also play a role in shaping XRP’s future trajectory. Hong Kong-based investment firm HashKey Capital recently announced the launch of the HashKey XRP Tracker Fund—the first XRP-focused investment vehicle in Asia. Backed by Ripple as the anchor investor, the fund is expected to transition into an exchange-traded fund (ETF) in the future. The initiative is designed to attract more institutional capital into the XRP ecosystem.
HashKey Capital has also indicated that this collaboration with Ripple could lead to further projects, including tokenized investment products and decentralized finance (DeFi) solutions. Vivien Wong, a partner at HashKey, emphasized the strategic value of integrating Ripple’s network with regulated investment infrastructure across Asia. Although the altcoin faces near-term pressure, long-term developments, including decreasing exchange reserves and rising institutional interest, may support its recovery as the broader market stabilizes.

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