XRP Tests Critical Support as ETF Inflows and RLUSD Adoption Wane

XRP is under pressure as it tests the $1 support level, facing challenges from slowing ETF inflows and declining adoption of Ripple Labs' stablecoin, RLUSD. The token is currently trading at $1.0424, just above its year-to-date low of $1.007. Technical indicators suggest a close below $1 could lead to a further decline to $0.85 to $0.88, a drop of 15% to 17% from current levels.

Institutional interest in XRP ETFs has significantly waned, with inflows dropping to $1 million this week from $14 million the previous week. This marks a sharp decline from the $131 million recorded in May. In contrast, Bitcoin and Ethereum ETFs saw inflows of $800 million and $244 million, respectively. Among XRP ETF providers, Bitwise leads with $303 million in assets under management, followed by Franklin and Canary.

RLUSD, Ripple Labs' stablecoin, is also losing momentum, with its market capitalization falling from $1.81 billion in June to $1.58 billion. While trading volume has increased, the number of unique holders has dropped by 8.5%, suggesting speculative trading rather than organic growth. Despite recent upgrades to the XRP Ledger, market sentiment remains cautious.

Derivatives markets show a heavily skewed positioning, with long/short ratios elevated across major exchanges. Long liquidations have hit $11.75 million in 24 hours, indicating significant losses for bullish traders. The combination of slowing ETF inflows, shrinking RLUSD adoption, and crowded long positions creates a fragile market structure, potentially exacerbating a decline if the $1 support fails.