XRP Faces Selling Pressure Following ETF Debut

The launch of the Bitwise XRP ETF on the New York Stock Exchange, anticipated as a landmark event for the digital asset, has instead triggered a significant market downturn. Rather than propelling prices upward, the introduction of this exchange-traded fund has coincided with a classic "sell the news" reaction, leaving investors to question whether the expected rally has been cut short.

While the commencement of trading for the Bitwise ETF represents a crucial step forward for institutional adoption of XRP, it has paradoxically unleashed a wave of selling. Market strategists identify this as a textbook market rotation. A substantial number of investors had previously positioned themselves in expectation of the regulatory approval, a strategy known as "front-running." Now that the event has occurred, these participants are capitalizing on the opportunity to realize profits. The outcome has been a disappointment for those anticipating an immediate price surge, with the token's value declining significantly.

Large Holders Exert Downward Pressure

The primary driver behind the current price weakness is visible in on-chain data. So-called "whales"—entities holding vast quantities of XRP—have been offloading their holdings aggressively over the past 48 hours. Approximately 200 million XRP, with an estimated market value of $400 million, have been sold into the market. This sudden supply shock is currently too substantial for the fresh capital inflows from the new ETFs to immediately counteract.

Should investors sell immediately? Or is it worth buying XRP?

The psychologically significant $2.00 price level is now under severe pressure. With its current price at $1.98, XRP is trading at its 52-week low. This price action has placed many short-term traders, who entered positions ahead of the ETF launch, in a loss-making position, thereby increasing the risk of panic selling.

Long-Term Fundamentals Offer a Silver Lining

Despite the present bearish sentiment, the fundamental outlook for XRP retains long-term promise. Two key developments provide a basis for optimism: the resolution of the legal conflict with the U.S. Securities and Exchange Commission (SEC) has finally delivered regulatory clarity, and a more crypto-accommodating stance from U.S. regulators under figures like Paul Atkins is taking shape. Furthermore, developers, including CTO David Schwartz, are actively discussing the implementation of "Native Staking" on the XRP Ledger. This upgrade could dramatically enhance the network's appeal within the decentralized finance (DeFi) ecosystem by introducing a mechanism to reward investors for holding their coins.

For the immediate future, however, the market environment remains tense. The trajectory for the coming weeks will be determined by the tug-of-war between sustained, long-term capital inflows from ETF products and the continued profit-taking activities of large-scale holders. A failure to swiftly reclaim the $2.20 resistance level could see the current downward trend gather further momentum.