XRP Supply Squeeze Intensifies as ETF Demand Grows — But Spot Buyers Remain Absent

Ripple's XRP has been under sustained selling pressure after leveraged traders lost their grip on the market, dragging the altcoin down to $1.02 — its weakest level since early February. The decline began with a slide toward $1.07, which subsequently triggered approximately $9 million in long liquidations on June 25th.

Binance alone accounted for roughly $4.5 million of those liquidations, underscoring how heavily concentrated leverage had become on a single platform. As forced selling accelerated, derivatives traders moved swiftly to cut exposure rather than open new long positions.

Open Interest data painted a clear picture of the damage. Binance's Open Interest plunged to nearly $205 million — the lowest reading since March 22nd — while Bybit's figure dropped to around $185 million, amplifying the cascading effect across major exchanges.

This coordinated contraction in speculative positioning signals that much of the excess leverage has been purged from the market. Historically, such cleanups tend to ease downside pressure by removing weak-handed leveraged participants from the equation. However, reduced leverage alone is unlikely to spark a sustained rally. The real question is whether fresh buyers will step in to fill the void left by liquidated positions or whether they will continue sitting on the sidelines.

On the institutional side, XRP ETFs are quietly tightening available supply even as broader market sentiment remains soft. Net inflows reached 4.82 million XRP during Week 26, pushing total ETF holdings up by nearly 10% to 938.73 million XRP — representing approximately 1% of the total circulating supply. Every new ETF unit created requires the purchase of additional spot XRP, meaning this steady accumulation is gradually shrinking the pool of XRP available for open-market trading, which could help dampen selling pressure over time.

Despite this institutional activity, the broader spot market has not shown any corresponding uptick in participation. Prices have continued to drift lower, and overall XRP market valuation has slipped from above $1 billion to approximately $989 million — indicating that institutional buying power is expanding faster than actual price appreciation.

This divergence raises an important question: can ETF-driven supply reduction alone generate a meaningful price recovery, or is robust spot market demand the missing ingredient? If ETF inflows maintain their current pace and are eventually joined by stronger retail and institutional spot buying, the shrinking liquid supply could meaningfully amplify any future price rebounds. Without that broader participation, however, accumulation may simply continue in the background without catalyzing a decisive breakout.

In summary, XRP's leverage reset has cleared a significant amount of speculative pressure from the market, creating a potentially cleaner foundation for recovery. Yet the path to a lasting upside move runs through the spot market — and for now, those buyers have yet to make their presence felt.