XRP once again sounds the guard battle at the $3 mark! The ETF has been successfully listed, but the price has fallen instead of rising, and on-chain indicators show that bearish sentiment dominates.

Despite the launch of the first XRP ETF (XRPP) by REX-Osprey, which set a volume record, the spot price of XRP has fallen instead of rising, dropping about 2% in the past 24 hours. This divergence indicates that while institutional demand for regulated products is strong, bearish sentiment among short-term market participants is dominating. The Long-Short Ratio of XRP has fallen to a 30-day low, and the money flow indicator shows that selling pressure is increasing, suggesting that its price may face a dip to $2.87 in the short term.

XRP ETF makes a record debut, but price performance is lackluster

The XRP exchange-traded fund (ETF) XRPP, launched by REX-Osprey, made a strong debut yesterday (September 19), breaking the previous records for all XRP-linked products. However, despite this historically successful start, the enthusiasm has not yet been able to boost XRP's spot price. In the past 24 hours, the token's price has fallen by 1%, while the broader cryptocurrency market has generally seen a rise during the same period. This indicates that while the strong launch of XRPP highlights the market's demand for XRP-related investment products, the bearish sentiment still prevails.

An earlier report indicated that within 90 minutes of the XRPP ETF trading starting, its volume reached five times that of the previous XRP-based futures contract volume, signaling a surge in institutional interest. However, despite the ETF's debut, XRP's price performance remained lackluster, falling by 1% within a day. This divergence primarily stems from the growing bearish sentiment among spot and derivatives traders, who seem reluctant to follow the bullish momentum brought by the ETF. Although the institutional demand for XRPP is undeniable, short-term market participants remain cautious, with many betting that the token's short-term upside potential is limited.

On-chain indicators reveal bearish sentiment dominance

The weakness in the XRP trend is reflected in its futures market Long-Short Ratio, which has now fallen to a 30-day low of 0.84, confirming that short-selling demand is increasing.

The Long-Short Ratio is an indicator that compares the number of long and short positions in the market. When the Long-Short Ratio of an asset is greater than 1, it indicates that there are more long positions than short positions; conversely, when this ratio falls below 1, it indicates that short positions dominate, reflecting a clear bearish sentiment in the market. As the ratio of XRP dips to a 30-day low, its futures traders are increasingly betting on further price declines, although the XRP ETF continues to be favored by institutions.

In addition, on the daily chart, XRP's Chaikin Money Flow (CMF) indicator is trending downwards and is about to fall below the zero line. This indicates a decrease in buying pressure, putting the token at risk of a short-term fall. The CMF indicator measures the capital flow in or out of an asset by tracking price and volume. An increasing CMF indicates stronger buying pressure, while a decreasing CMF signifies increased selling pressure and potential sell-offs. For XRP, the downward trajectory of its CMF suggests that despite a surge in institutional demand through the XRPP ETF, participants in the spot market are steadily withdrawing liquidity.

Price at a Crossroads: Key Support and Resistance

This trend highlights the risks that XRP has recently faced. Unless spot buying pressure increases and cross-market sentiment turns positive, the price of the token may consolidate sideways or even dip to $2.87. However, if new demand floods into the market, this could bolster XRP's strength and push its price up to $3.22.

Conclusion

The historic debut of the XRPP ETF stands in stark contrast to the lackluster performance of XRP's spot price, revealing a key underlying contradiction in the current market: the struggle between institutional capital's long-term optimism and short-term traders' caution or even bearish sentiment. Although the ETF offers a new investment avenue, market indicators suggest that liquidity in the spot market is being withdrawn under the dominance of derivative positions. The future direction of XRP will depend on the outcome of this contest between the two forces—whether long-term institutional demand ultimately overcomes the short-term bearish sentiment, pushing its price to new highs; or whether short-term selling pressure continues to dominate, leading to a price retreat to key support. This is not only a test of XRP's intrinsic value but also a true reflection of the maturity of the crypto market and how different types of capital influence one another.