XRP's Institutional Bull Case Amid Profit-Taking and ETF Momentum

The XRP market in late 2025 is a study in contrasts. On one hand, institutional adoption and ETF momentum are accelerating, with Ripple securing $500 million in funding at a $40 billion valuation and 11 XRP ETFs appearing on DTCC's list, signaling potential SEC approval by mid-2026. On the other, long-term holders have sold $260 million worth of XRP since August 2025, pushing the price down from $3.3 to $2.4 and creating a bearish overhang. This divergence between institutional optimism and retail skepticism defines the short-to-medium-term strategic positioning for XRP.

ETF-Driven Demand: A Structural Catalyst

The launch of U.S.-listed XRP ETFs in late 2025 has injected institutional-grade liquidity into the asset. The Canary Capital XRPC ETF, for instance, recorded $58 million in first-day trading volume, while cumulative inflows across XRP ETFs surpassed $293 million. These figures reflect a structural shift: institutional investors are now accessing XRP through regulated vehicles like Bitwise's physically backed ETF, which emphasizes custodial safeguards and compliance.

Ripple's strategic moves further amplify this momentum. The company's expansion of RLUSD stablecoin and a lending platform on the XRP Ledger address institutional demand for yield generation. Meanwhile, Ripple's $1 billion acquisition of GTreasury and integration into corporate treasury systems position XRP as a tool for institutional liquidity management. Analysts project that sustained ETF inflows could drive XRP above $5 within months, assuming adoption continues at the current pace.

However, price action has lagged. Despite ETF inflows, XRP's price fell 11% post-launch due to whale selling-200 million XRP were offloaded within 48 hours highlighting a critical tension: institutional capital often takes time to influence prices meaningfully, and the lag may persist until 2026.

Long-Term Holder Dynamics: Selling Pressure vs. Whale Accumulation

Long-term holders have been net sellers since mid-October, with the Hodler Net Position Change metric remaining negative. This selling pressure coincides with a drop in XRP's price below the $2 support level, historically a key psychological barrier. On-chain analytics from Glassnode reveal a 580% surge in daily selling volume by long-term holders, reflecting waning confidence in near-term prospects.

Yet, whale activity tells a different story. Large addresses have accumulated 8.24 billion XRP in two weeks, up from 6.9 billion according to on-chain data. This suggests a long-term belief in XRP's value, even as broader market conditions weaken. However, the negative net position change and declining active addresses on the XRP Ledger indicate that retail and mid-sized holders are still offloading according to recent analysis.

The interplay between these dynamics creates a volatile environment. While whales are accumulating, their actions could be interpreted as profit-taking or hedging against regulatory uncertainty. Meanwhile, the broader market's reliance on XRP ETFs as a proxy for institutional demand may mask underlying fragility in on-chain fundamentals.

Strategic Positioning: Navigating Divergence

For investors, the key lies in reconciling these two forces. The ETF-driven bull case hinges on regulatory clarity and the eventual approval of XRP ETFs, which could unlock $24 price targets if inflows absorb liquidity effectively. However, short-term price weakness-such as the drop to $1.61 if support at $2.00 fails-remains a risk according to market analysis.

Technical indicators like RSI and EMA currently show bearish bias, but analysts argue that consolidation in the $2.12–$2.17 range is a necessary phase as institutional flows align with risk budgets according to technical analysis. The critical test will be whether XRP can reclaim key resistance levels like $2.45, which would validate the ETF-driven narrative.

Conclusion: A Tale of Two Markets

XRP's institutional bull case is built on the premise that ETFs will eventually overcome short-term selling pressure and on-chain weakness. The $40 billion valuation secured by Ripple and the $293 million in ETF inflows underscore the asset's growing legitimacy. Yet, the market remains in a transitional phase, where whale accumulation and ETF-driven demand must outpace bearish forces like retail selling and macroeconomic headwinds.

For strategic positioning, investors should balance exposure to ETF-driven optimism with caution around near-term volatility. The path to $5–$8 by 2030 is plausible, but patience will be required until mid-2026, when regulatory clarity and institutional adoption fully materialize. In the meantime, XRP's price will likely oscillate between bearish corrections and ETF-fueled rebounds-a dynamic that defines its current institutional bull case.