XRP ETF Accumulation Creates Supply Squeeze While Spot Market Buyers Stay on the Sidelines
XRP experienced a sharp downturn as leveraged positions collapsed, dragging the altcoin to $1.02 — a level not seen since early February. The selloff began with a slide toward $1.07, which then triggered approximately $9 million in long liquidations on June 25th, accelerating the downward pressure across the board.
Binance bore the brunt of the liquidation event, accounting for roughly $4.5 million of the total — a figure that underscores how heavily concentrated leverage had become on a single platform. As forced selling escalated, derivatives traders moved swiftly to cut their exposure rather than doubling down with new positions.
The impact was visible across multiple platforms. Binance Open Interest tumbled to approximately $205 million, the lowest reading since March 22nd. Bybit followed suit, with Open Interest sliding to around $185 million. This coordinated drop across exchanges signals that the speculative excess that had been building in the market has now been largely flushed out.
Historically, leverage resets of this nature tend to relieve some downward pressure by removing weakly held positions from the equation. However, reduced leverage alone is rarely sufficient to spark a meaningful price recovery. The critical question now is whether fresh buyers will step in to fill the void left by liquidated longs — or whether they will continue watching from the sidelines.
On the supply side, XRP ETFs are quietly reshaping the available market inventory. During week 26, net inflows into XRP ETFs reached 4.82 million XRP, pushing total ETF holdings up by nearly 10% to 938.73 million XRP. That figure now represents approximately 1% of all XRP currently in circulation.
Every new ETF creation unit requires the purchase of additional spot XRP, which gradually reduces the amount of freely tradeable supply on open markets. In theory, this shrinking liquid supply should help limit potential selling pressure over time.
Despite this institutional accumulation, the broader spot market has not responded with matching enthusiasm. Retail and non-ETF buyers have remained largely absent, which explains why prices have continued drifting lower even as ETF holdings grow. XRP's total market valuation, which once exceeded $1 billion, has since slipped to around $989 million — suggesting that institutional buying power has expanded faster than the asset's overall market value.
The setup heading forward presents an interesting dynamic. ETF-driven supply tightening creates the structural conditions for a sharper price recovery, but that recovery will only materialize if spot market demand begins to accelerate alongside continued institutional inflows. Without broader participation, ETF accumulation may continue quietly without producing an immediate breakout in price.
In summary, XRP's leverage overhang has been largely cleared, reducing one source of downward risk. Yet a durable recovery remains contingent on spot buyers returning in force. The supply squeeze building through ETF demand could amplify future price moves significantly — but the timing of that catalyst remains uncertain.
