XRP ETF supply squeeze builds – The absence of Spot buyers raises questions

Ripple’s [XRP] decline continued after leveraged buyers lost control, pushing the altcoin down to $1.02, its lowest value since early February. Initially, the price slipped toward $1.07 before triggering nearly $9 million in long liquidations on the 25th of June.

Binance led with about $4.5 million, highlighting the concentration of the leverage that existed within one exchange. As forced selling intensified, derivatives traders rapidly reduced exposure instead of adding fresh positions.

Binance Open Interest dropped to nearly $205 million, marking its lowest level since the 22nd of March. Meanwhile, Bybit Open Interest fell to around $185 million, reinforcing the domino effect of the catastrophe.

This synchronized decline suggests speculative excess has largely been flushed from the market. Such resets typically take some pressure off the downside because they eliminate the weakly positioned leveraged sellers.

Otherwise, lower leverage alone may stabilize volatility without generating a sustained recovery. The next directional move will likely depend on whether fresh buyers replace liquidated positions or continue waiting on the sidelines.

ETF demand tightens XRP supply

XRP ETF demand is tightening available XRP supply despite the market weakness. The net inflow reached 4.82 million XRP during week 26, driving total ETF holdings up by almost 10% to 938.73 million XRP, which accounts for approximately 1% of the currently circulating XRP.

With each new ETF creation requiring the purchase of additional Spot XRP, this gradual reduction in available XRP on the open market can help limit the amount of sellable inventory or reduce potential selling pressure.

On the other hand, despite the fact that institutional buyers are accumulating significant amounts of XRP via the ETFs, no corresponding increase in participation from the broader spot market has been seen.

As such, prices have continued to be pressured downward. In addition to the decrease in price, valuations have also declined from over $1 billion at one time down to $989 million at present.

As such, it appears that institutional buying power has increased more than the valuation of XRP.

If ETF inflows persist alongside stronger spot demand, shrinking liquid supply could increasingly amplify future price recoveries. Otherwise, accumulation may continue without triggering an immediate breakout.

Final Summary

• Ripple’s leverage reset has reduced speculative pressure, but sustained recovery still depends on fresh spot demand returning.
• XRP ETF accumulation continues tightening liquid supply, though stronger Spot participation remains essential for a lasting breakout.