XRP Supply Shock: $1.65B ETF Inflows Meet 8-Year Technical Breakout
Institutions have absorbed $1.65 billion in XRP while exchange balances hit multi-year lows, creating a classic supply squeeze as the XRP/BTC ratio signals a 2018-style breakout.
The Squeeze Is In
The institutional bid for XRP has officially decoupled from the broader crypto market. While Bitcoin bled $1.09 billion in December, XRP ETFs absorbed a relentless $1.65 billion in capital since mid-November 2025. The token held $2.37 (+11%) today, driven by a specific market mechanic: a supply-side liquidity crisis.
Data from SoSoValue confirms 43 consecutive days of positive inflows for products like the Bitwise and Canary XRP ETFs. There have been zero outflow days since launch. This is not retail speculation; it is systematic accumulation by issuers who must buy spot XRP to back shares, regardless of daily sentiment.
Institutions Buy, Exchanges Bleed
The price action is being exacerbated by a thinning order book. On-chain analysis indicates exchange balances collapsed 45% throughout 2025, from 3.95 billion to 2.6 billion tokens. Liquidity on venues like Binance and Coinbase is now at multi-year lows, making the asset highly sensitive to demand shocks.
The trade is clean right now: $2.21 is the line… a high-volume shakeout followed by a trend resumption attempt.
This divergence, institutions buying $483 million in December while retail sold, has created a “paper thin” supply scenario. When issuers enter the market to settle daily creations, they are chasing fewer available tokens.
The ‘Once-Per-Cycle’ Signal
Traders are eyeing a rare technical confirmation. The XRP/BTC ratio is testing a breakout above the monthly Ichimoku cloud for the first time since 2018. CoinDesk noted this shift historically precedes periods where XRP drastically outperforms the wider market. If the monthly close holds, technical analysts project a rotation that could target the $6–$8 range by year-end, purely on the mechanics of the squeeze.
