XRP Today News: ETF weekly volume falls to 82 million, profit pullback surge.

The news focus on XRP today is on the significant weakening of the ETF capital inflow momentum. In the week of December 19, the issuer of the XRP Spot ETF reported a net inflow of $82.04 million, the lowest level since its launch in November. On December 22, the price of XRP hovered below the psychological barrier of $2, and as the end of the year approaches, profit pullbacks have led to a price fall.

Warning: ETF fund inflows have plummeted to a new low

(Source: SoSoValue)

The most concerning data in today's XRP news is the significant weakening of the ETF capital inflow momentum. As of the week ending December 19, XRP Spot ETF issuers reported a net inflow of $82.04 million, the lowest level since its launch in November. This downward trend corresponds with the XRP price falling from $2.50 in early December to the current $1.92, indicating a clear positive correlation between capital inflow and price.

The US XRP Spot ETF market has risen for 25 consecutive trading days, with a net inflow of funds reaching $1.07 billion. This continuous inflow record was broken last week, with weekly capital absorption plummeting to $82 million. In contrast, the US BTC Spot ETF market saw a net inflow of funds of $4.85 billion in the previous 25 trading days, with XRP only accounting for 22% of that. This significant gap is partially due to structural factors.

The structural reasons for the relatively low inflow of funds into the XRP ETF include: there are currently 5 XRP Spot ETFs and 11 BTC Spot ETFs, indicating a smaller number of products; none of the top ten ETF issuers by assets under management are participating in XRP, lacking endorsements from giants like BlackRock; overall macroeconomic conditions have seen a net outflow of $1.9 billion from the U.S. Bitcoin Spot ETF market since the XRP Spot ETF began trading, indicating that institutional funds are withdrawing from the cryptocurrency market as a whole in the fourth quarter.

Three Major Differences Between XRP ETF and BTC ETF

Product Quantity Gap: 5 XRP ETFs vs 11 BTC ETFs, both selection and liquidity are inferior to Bitcoin.

Absence of Giants Effect: BlackRock's IBIT monopolizes $62.5 billion inflow, XRP lacks similar flagship products.

Deteriorating Macroeconomic Environment: The timing of the XRP ETF launch is unfavorable, coinciding with a market pullback in the fourth quarter, with BTC ETF outflows of $1.9 billion.

BlackRock has yet to launch an XRP product, which is the biggest shortcoming in the XRP ETF market. BlackRock's iShares Bitcoin Trust (IBIT) has recorded a net inflow of $62.5 billion since its inception, ranking first among Bitcoin Spot ETFs. If BlackRock announces the launch of an XRP ETF, it could instantly change the market landscape. However, until BlackRock makes a statement, the XRP ETF market will continue to lack a “leader.”

Technical and fundamental struggle at the 2 dollar level

(Source: Trading View)

From the daily chart, breaking through the psychological barrier of 2 dollars will pave the way for a drop to the 50-day moving average. The XRP price is far below the 50-day and 200-day EMA, indicating a bearish tendency. Key technical levels to watch include: support at 1.75 dollars, then 1.50 dollars; resistance at the 50-day moving average at 2.1343 dollars; resistance at the 200-day moving average at 2.4098 dollars; and resistance levels at 2 dollars, 2.5 dollars, 3.0 dollars, and 3.66 dollars.

If the price continues to break through the 50-day moving average, it indicates a reversal of the short-term bearish trend, at which point the 200-day moving average and the resistance level of 2.5 dollars will come into play. A breakthrough of the EMA line will confirm the medium-term outlook, as well as a longer-term target price of 3.0 dollars (8-12 weeks). However, if the price is blocked at the psychological level of 2.0 dollars and breaks below the downtrend line, the short-term to medium-term bullish outlook will be invalidated, signaling a reversal of the bearish trend.

Despite the bearish technical outlook, the fundamentals are increasingly overshadowing the technicals. Market expectations for a rate cut by the Federal Reserve in March continue to rise, with data from the CME FedWatch Tool showing the probability of a March rate cut rising from 47% on November 21 to 56.3% on December 19. At the same time, last week's dovish rate hike by the Bank of Japan put pressure on the demand for the yen, causing the USD/JPY exchange rate to rise by 1.45% on December 19.

Market expectations for a rate cut by the Federal Reserve in March continue to rise, and concerns about the unwinding of yen carry trades have eased, all of which support a bullish outlook for XRP in the short to medium term. A more important catalyst is the progress of the Market Structure Act on Capitol Hill. Although the U.S. government shutdown has delayed the bill's progress, lawmakers still hold out hope for deliberations in early January. Whether the Market Structure Act can be passed in the first quarter is likely to be a key catalyst affecting price trends.

On July 17, boosted by the U.S. House of Representatives passing the Market Structure Bill and submitting it to the Senate, the price of XRP surged by 14.69% in a single day. This historical experience shows that regulatory progress has a very direct impact on the price of XRP. If the Market Structure Bill is passed by the Senate in January, XRP may replicate the explosive growth pattern seen in July.

Medium to Long-term Outlook and Risk Scenarios

In light of these bullish factors, the short-term (1-4 weeks) outlook has turned bullish, with a target price of $2. The mid-term (4-8 weeks) and long-term (8-12 weeks) outlooks remain optimistic, with target prices of $2.5 and $3.0 respectively. Within a time frame of 6-12 months, if the stock price rebounds to the historical high of $3.66, it is expected to reach $5.

However, several situations may pose challenges to the bullish outlook: the Bank of Japan announced that it would set the neutral interest rate between 1.5% and 2.5% and emphasized the need to actively respond to inflation; U.S. economic data and comments from Federal Reserve officials have lowered market expectations for a rate cut in March; MSCI's removal of Digital Asset Reserve Company (DAT) from the index may decrease market interest in XRP as a reserve asset; the U.S. Senate opposes the Market Structure Bill; and there are reports of capital outflows from the XRP Spot ETF. These situations could lead to a fall in XRP's price to $1.75, indicating a reversal of the bearish trend.

In summary, due to fundamental factors offsetting the bearish technical factors, the short-term outlook has turned cautiously bullish. At the same time, the medium to long-term outlook is also relatively optimistic. The key lies in whether $2 can be held and broken through, which will determine whether XRP will return to an upward trajectory or further decline.