XRP is at a textbook make-or-break point.
Normally, extended consolidation within an important range could suggest accumulation. Looking at this from a large institutional point of view, it appears that XRP is receiving ETF inflows to support this trend, as it continues to trade away from the other high-cap assets.
Building on what AMBCrypto recently reported, the U.S. spot XRP ETFs pulled in $4.26 million this week, flipping back to inflows after their first weekly outflow in 13 weeks. Ethereum ETFs, meanwhile, saw over $225 million outflow in the same window.
Naturally, this raises the question: Is institutional capital starting to favor Ripple [XRP] over ETH?
As the chart above shows, the XRP/ETH ratio has corrected intraday after rallying 2.79% last week. It had been approaching the key resistance level of 0.0005, which has proved to be hard to get back to since it was lost during the late August cycle. In essence, XRP is showing relative strength in ETF flows; however, to confirm its strength against ETH, it needs to break out of resistance cleanly.
Notably, this is where the smart money plays its part. With XRP/ETH hitting resistance just as the broader market turns risk off, the recent divergence in ETF flows may not be enough for XRP to maintain its relative strength. If selling pressure picks up, $1 comes into focus as a key psychological level to watch.
XRP faces a critical test as ETF demand clashes with whale distribution
As mentioned earlier, XRP’s current setup could go either way.
Technically speaking, the altcoin has been in a consolidation phase above the $1.20 price level for more than ten weeks now. This creates a lot of pressure to break out upwards or downwards. However, looking at the ETF and spot volume it looks like XRP is in an accumulation phase, suggesting buyers may be absorbing supply during XRP’s prolonged consolidation above $1.20.
However, whale activity indicates otherwise. As can seen in the post below, XRP whales are dumping their holdings. The amount of wallets containing 10-100 million XRP have decreased from 351 to 339 over the last few weeks. At the same time, XRP held on exchanges has risen from 11.003 billion to 11.05 billion.
Together, the combination of rising reserves and falling whale holdings shows smart money may be selling out of XRP during its period of consolidation. This means there is increased downside risk as increased selling may mean large holders are trying to position themselves ahead of any downward movement.
This puts Ripple’s relative strength vs. Ethereum under scrutiny.
With XRP/ETH hitting resistance, whales dumping and the overall risk off sentiment, recent inflows from the ETFs may not be enough to continue pushing XRP higher. This selling pressure could cause the current consolidation phase to turn into a larger correction, with $1 level in focus.
Final Summary
XRP ETFs are seeing inflows while Ethereum ETFs face outflows, but XRP still needs to break key resistance against ETH.
Whales are selling while exchange reserves rise, raising the risk of XRP falling below $1.20 toward $1.