XRP (CRYPTO: XRP) price dropped below the crucial support level of $1, reaching $0.995, its lowest level since November last year. The Ripple-linked token is now trading 72% below its all-time high, continuing a bear market that started in July last year.

The token has underperformed major cryptocurrencies like Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) this year. This underperformance aligns with weakening demand indicators across both exchange-traded funds and the broader Ripple ecosystem.

ETF Inflows and Stablecoin Demand Decline

Data indicates that demand for XRP-focused ETFs has continued to wane this year. Funds tracking the token recorded over $3.27 million in inflows this month so far, a sharp decrease from the $27 million added last month. At their peak in May this year, these funds saw over $131 million in inflows.

Cumulative inflows for XRP ETFs stand at over $1.51 billion, with current net assets at $933 million. The largest funds are managed by companies including BitWise, Franklin, and Canary. The fading demand for these ETFs signals reduced interest from American institutional and retail investors as the crypto winter continues.

Simultaneously, demand for the Ripple USD stablecoin has weakened. Its market capitalization fell to $1.71 billion from a year-to-date high of $1.81 billion.

Ecosystem Activity Slows

Activity on the XRP Ledger has also slowed in recent months. Data from XRPScan shows drops in active accounts, transactions, and fees. According to DeFi Llama, the total value locked in the ecosystem dropped to $29 million from a record high of $115 million. Chain fees fell to just $48,120 in the first quarter, down from a peak of $1.4 million in the fourth quarter of 2024.

What the Numbers Show

The divergence between cumulative ETF inflows of over $1.51 billion and current net assets of $933 million highlights significant outflows or valuation adjustments within the fund structures. Additionally, the contraction in chain fees from $1.4 million to $48,120 mirrors the decline in total value locked, suggesting a broad-based reduction in network utility and transaction volume rather than isolated fee changes.

Technical Outlook

Technical analysis suggests potential for further downside. The daily chart shows XRP forming a descending triangle pattern, having moved below the lower side, which typically leads to more downside over time. The token has dropped below the 50-day Exponential Moving Average (EMA), while the Relative Strength Index (RSI) has fallen below 50 and pointed downwards for several months.

Analysts note a risk that the token could fall to the psychological level of $0.50. A bullish reversal would be confirmed only if the price moves above the 200-day moving average level of $1.3514.

XRP faces a potential 50% decline toward $0.50 as three major regulatory catalysts vanish and spot ETF inflows dry up, according to analysis by CryptoQuant analyst PelinayPA. The analyst argues that the asset’s slide toward $1 reflects a structural shift in market dynamics rather than a mere technical breakdown, driven primarily by an absence of new demand to replace recent selling pressure.

Market Structure and Whale Activity

The decline is characterized by a divergence between large-holder behavior and price action. Whale-to-exchange flows on Binance have dropped roughly 39% to a reading of 77, indicating that large holders are not driving the current sell-off. Instead, the market lacks strong new demand to support prices after XRP made lower levels from its peak near $3.39.

Despite the weak price environment, whale accumulation continues. Analyst Ali Charts noted on X that whales purchased over 72 million XRP in the past 24 hours. This accumulation stands in contrast to the broader price weakness, creating a setup where large holders are buying while the asset tests critical support levels.

Regulatory Tailwinds Vanish

Three regulatory developments previously viewed as near-term support for XRP have been removed or stalled:

• The SEC delayed its innovation exemption for tokenized securities following pushback from the White House and Wall Street regarding its legal foundation.
• The SEC cancelled its planned open meeting on Reg Crypto, the proposed fundraising framework for token projects, with no rescheduled date announced.
• The Clarity Act remains stalled in the Senate with no vote timeline visible.

ETF Inflows Compress

Spot ETF flows for XRP have shown significant compression. Weekly inflows recorded $14.86 million, $1.01 million, and $2.25 million across four sessions this week, according to SoSoValue data. The entire current week’s inflow originated from Bitwise’s XRP product alone, while Franklin, Canary, 21Shares, and Grayscale recorded zero flow.

What the Numbers Show

The data reveals a stark dependency on a single institutional player for liquidity. With Franklin, Canary, 21Shares, and Grayscale recording zero flow, Bitwise accounts for 100% of the current week’s XRP spot ETF inflows. This concentration suggests that broad institutional interest may be waning, leaving the asset vulnerable to further downside if regulatory clarity does not emerge quickly.