Institutional XRP Demand Under Pressure as ETFs See Outflows

A new analysis suggests weak liquidity may be preventing XRP from entering a new rally phase. In a recent market update, an analyst pointed to declining ETF flows and exchange activity as signs that capital is leaving the market. According to the analyst, the lack of inflows could leave XRP vulnerable to further downside before the next bull cycle begins.

XRP liquidity remains weak

In a YouTube video streamed on March 15, renowned cryptocurrency market analyst Zach Rector explained that, though prices have remained relatively stable, underlying liquidity metrics paint a different picture. As he explained, describing current market conditions:

“Right now, the liquidity is not there, the volume is not there.”

According to the analyst, market makers still have the ability to push prices higher temporarily when trading volume is thin, which can create a misleading sense of bullish momentum.

He warned that the market may still be vulnerable to a liquidity sweep if negative macro headlines appear.

ETF flows turning negative

One key factor cited in the analysis is declining activity in XRP exchange-traded funds (ETFs). Data referenced by Rector shows that XRP ETFs experienced two consecutive weeks of net outflows, totaling roughly 24 million XRP. He noted:

“Over the last two weeks, we’ve had about 24 million XRP flow out of XRP ETFs.”

Although ETF flows do not directly affect exchange prices because many transactions occur over-the-counter, the trend still signals weakening investor demand.

Exchange activity also falling

Exchange flow data shows similar patterns of declining participation. According to figures cited in the update, major platforms such as Binance, Coinbase, and Bybit recorded tens of millions of dollars worth of XRP outflows over the past week.

Rector said that reduced activity across centralized exchanges contributes to the current range-bound price behavior. Without stronger inflows, XRP may continue trading sideways rather than beginning a sustained breakout.

Meanwhile, XRP is currently changing hands at the price of $1.47, which indicates an increase of 3.9% on the day, 9.4% across the week, and 1.8% over the past month, per the latest chart data.

Analyst sees possible downside before rally

Despite the weak liquidity environment, Rector still believes a broader bull cycle could eventually resume.

However, he warned that prices may first move lower as the market processes macroeconomic risks and geopolitical developments. As he highlighted:

“I still think that when those headlines hit, we’re going down to $1.20.”

According to the analyst, stronger inflows and higher trading volume would be needed before XRP could return to the type of rally conditions seen during previous bull markets.

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