XRP is facing renewed selling pressure as momentum behind spot exchange-traded funds (ETFs) wanes, with analysts now flagging a potential 35% downside risk. The digital asset, which had rallied on optimism over regulatory clarity, is now vulnerable to a sharp correction if key support levels fail to hold.

ETF Flows Turn Negative

Recent data shows that inflows into XRP-focused ETFs have slowed considerably, and in some cases reversed, as institutional investors pare back exposure. The weakening demand comes amid broader market uncertainty and profit-taking after a strong run earlier in the year.

According to Bitget's analysis, the shift in ETF flows has directly impacted sentiment, with the odds of a sustained price breakout now significantly reduced. Market participants are closely monitoring whether the latest outflows are a temporary blip or the start of a longer-term trend.

What's Behind the Slowdown?

  • Macro headwinds: Rising interest rates and a stronger dollar have reduced appetite for risk assets, including cryptocurrencies.
  • Regulatory overhang: Ongoing legal battles and unclear guidance continue to weigh on XRP's institutional appeal.
  • Profit-taking: Early investors are locking in gains after XRP's previous rally, adding to selling pressure.

Technical Picture Points to 35% Drop

From a technical standpoint, XRP has broken below several key moving averages, and the next major support level sits well below current prices. If that support fails, a decline of up to 35% is possible, according to analysts.

The bearish setup is reinforced by declining trading volumes and a series of lower highs on the daily chart. While some traders see a potential bounce, the overall trend has turned decidedly negative.

Key Levels to Watch

  • Immediate support: The $0.50–$0.52 zone, which has held multiple times in the past.
  • Critical resistance: The $0.60–$0.62 area, which now acts as a ceiling.
  • Downside target: If support breaks, the next major level could be around $0.40.

Odds of Recovery Diminish

Market prediction platforms have also lowered the probability of XRP reaching new highs in the near term. The combination of weak ETF flows, technical breakdown, and cautious sentiment has reduced the odds of a swift recovery.

"The window for a quick rebound is closing," noted one analyst. "Unless we see a major catalyst, such as a favorable court ruling or a surge in ETF inflows, the path of least resistance is lower."

Some investors remain hopeful that a resolution in the Ripple-SEC case could trigger a rally, but legal timelines remain uncertain. In the meantime, traders are advised to manage risk carefully and avoid overexposure.

Key Takeaways

  • XRP faces a potential 35% downside if key support levels fail.
  • ETF inflows have weakened, contributing to bearish sentiment.
  • Technical indicators show a deteriorating trend with lower highs and declining volume.
  • Market odds for a near-term recovery have fallen.
  • Investors should watch the $0.50 support level closely for signs of a breakdown.

As always, cryptocurrency markets are highly volatile, and past performance is not indicative of future results. Stay informed and trade responsibly.