The crypto community anticipated a major rally following the launch of the first spot $XRP Exchange-Traded Fund (ETF). However, instead of soaring, XRP took a sharp dive, shedding over 7% in a single day, falling from the $2.50 zone down toward $2.20.
For many investors, the question is urgent: Why is XRP falling right after a historic ETF debut?
The Real Reasons Behind the Sell-Off
The consensus among analysts points to two primary factors: the broader market environment and the nature of ETF launches themselves.
1. Market-Wide Headwinds Overshadow Positive News
Crypto analyst Nick Crypto Crusader explains that XRP's decline is not an isolated event. Bitcoin is currently undergoing a sharp sell-off, which is dragging most altcoins down with it.
* During periods of strong market-wide pressure, even significantly positive news struggles to generate upward momentum. XRP is simply following the general trend.
2. The ETF Buying Pressure Hasn't Fully Started
Despite the price drop, the debut of Canary Capital’s spot XRP ETF (XRPC) was historically strong.
* Unexpected Success: The fund opened with over $58 million in first-day trading volume, crushing the $17 million estimate and making it the strongest ETF launch of the year.
* Small Impact (For Now): Crusader noted that while $58 million is impressive, it is still a relatively small amount compared to XRP's massive market capitalization. It will take far larger inflows to meaningfully impact the spot price.
* Delay in Spot Purchase: The key takeaway is that Canary Capital still needs time to purchase the actual XRP required to back the ETF shares that were bought on day one. This means the real buying pressure from the fund—which will reduce supply—hasn't even begun yet.
> Crucial Insight: ETF launches rarely result in instant price spikes. Even Bitcoin experienced a dip when its spot ETFs went live in January 2024; the larger, institutional-driven movements came later.
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📉 Technical Warning: A Major Breakdown Signal
Adding to the bearish sentiment are technical factors highlighted by trader ChartNerd.
* Descending Triangle Break: XRP recently broke down from a descending triangle pattern, losing the crucial $2.70 support level in late October.
* Current Zone: This breakdown pushed the token into the critical $2.00–$2.20 support zone.
* Path to Recovery: For XRP to initiate a recovery, it needs a decisive break above $2.40.
* Downside Risk: If it fails to hold the current support, the price could slide further toward key levels at $1.80 and potentially $1.50.
In summary, the XRP price drop is a result of market-wide selling combined with the simple fact that the real, sustained institutional buying from the ETF has not yet hit the market. Investors will need to be patient to see the full impact of the historic ETF launch.
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