Ripple’s native cryptocurrency, XRP, is currently experiencing significant selling pressure, trading 7% lower since the start of 2025. This persistent downward trend appears to be driven primarily by sell-offs from whales and long-term holders. Despite positive inflows into spot XRP exchange-traded funds (ETFs), XRP’s price remains entrenched in a six-month decline, indicating a concerning shift in market sentiment.
XRP had a remarkable run over the past two years, with a notable 81% gain in 2023 and an impressive 238% surge in 2024. These increases were largely attributed to improving regulatory clarity and heightened speculative interest. However, the current market cycle poses a risk to this bullish trend, with XRP possibly on the verge of reporting negative annual returns for the first time in two years. The cryptocurrency’s recent performance has mirrored that of Bitcoin, with both showing declines.
On-chain data reveals a spike in realized profits and losses, particularly in the fourth quarter, where XRP holders exited positions at a loss. This trend has significantly diminished investor confidence. Typically, investors in large-cap tokens tend to weather market downturns while holding out for recovery; however, this cycle has seen a marked change in behavior. The inclination to sell at a loss is indicative of increasing uncertainty regarding XRP’s short-term prospects. This shift in sentiment has been exacerbated by a general atmosphere of risk aversion, which has dominated trading activity.
The trading metrics on the XRP Ledger also reflect this declining interest, with data showing that the number of active transacting addresses dropped to a monthly low of 34,005. Such a decrease signals reduced engagement from both retail and institutional investors, further compounding the downward pressure on XRP.
In a contrasting development, US-based spot XRP ETFs have recorded strong inflows since their inception last month, accumulating net inflows of approximately $1.13 billion, which brings total assets under management to roughly $1.25 billion. Notably, on December 23, these ETFs saw net inflows of $8.19 million, with Franklin Templeton’s XRPZ leading the inflows. Other ETFs, such as those offered by Bitwise and Grayscale, have also contributed, while market activity remains subdued due to the holiday season.
Institutional investors appear to be shifting their capital away from Bitcoin and Ethereum ETFs towards XRP ETFs, signaling a potential change in sentiment and a more favorable outlook for XRP amid evolving market conditions.
