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XRP ETFs End Three-Week Rally: Weekly Inflows in the Negative

XRP spot cryptocurrency exchange-traded funds (ETFs) saw net outflows last week, marking the end of three consecutive weeks of inflows. This development sends a strong signal that institutional appetite for the asset is cooling.

Liquidity conditions on the crypto exchange also weakened during the same period. The exchange's 30-day XRP liquidity index fell to its lowest level in five years.

Institutional Demand Cools in XRP After April's Jump!

According to the data, approximately $35,210 flowed out of XRP ETFs in the week ending May 1st. This brought an end to the period of steady buying.

XRP ETFs had captured a total of $82.88 million in inflows over the previous three weeks. Net inflows reached $55.39 million in the week of April 17th alone. This figure represents the strongest inflow since mid-January.

Cumulative net inflows have now reached $1.29 billion. However, weekly net assets have fallen to $1.06 billion.
XRP Liquidity Index Hits Five-Year Low on a Crypto Exchange!

Meanwhile, an analyst pointed out that XRP's liquidity index has fallen to 0.038, its lowest level since 2020. According to the analysis, this decline indicates a "clear weakness in market depth."

In this way, even capital inflows from combination ratios can move the price up or down. However, the analyst noted that currently, the price movement is involving quite a few members.

Such periods are seen as a transitional phase where prices still fully reflect weakening liquidity, or a phase of price stagnation in preparation for a larger move.

This drop in the liquidity index could indicate that significant growth is exiting, or that institutional trading activity is decreasing. This further increases market fragility, he said.

The current picture leaves XRP open on two fronts. A small inflow in limited liquidity could trigger a sharp rise. Conversely, continued weak demand could amplify the downside risks.
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