XRP ETF Inflows Limit Losses After Senate Crypto Policy Jolt

The XRP market faced sudden pressure after a surprise policy setback in the U.S. Senate rattled investor confidence, but strong demand for XRP exchange-traded funds (ETFs) helped soften the blow. While regulatory uncertainty triggered short-term volatility, institutional capital flows suggest that downside risk for XRP remains structurally supported.

Senate Delay Triggers Short-Term Market Shock

XRP prices slipped after the U.S. Senate delayed progress on key crypto market structure legislation aimed at defining regulatory oversight for digital assets. The pause injected fresh uncertainty into the market, leading to a brief risk-off reaction among traders. Within 24 hours of the announcement, XRP fell nearly 4%, briefly testing the $2.00 psychological support zone before stabilizing.

Historically, regulatory delays have had an outsized impact on assets closely tied to U.S. policy clarity. XRP, often viewed as a bellwether for regulatory outcomes due to Ripple’s long legal history, was particularly sensitive to the news.

XRP ETF Demand Provides a Strong Safety Net

Despite the policy shock, ETF flows told a very different story. Data from U.S. markets shows XRP spot ETFs recorded approximately $55 million in net inflows over the past week, a 45% increase compared to the prior week’s $38 million. This steady accumulation suggests institutional investors used the dip as a buying opportunity rather than an exit point.

Since the start of the year, cumulative inflows into XRP ETFs have crossed $420 million, accounting for an estimated 3.2% of XRP’s actively traded circulating supply.

Institutional vs Retail Behavior Divergence

On-chain and derivatives data highlights a clear split between institutional and retail behavior. Retail trading volumes dropped nearly 12% following the Senate delay, while futures open interest declined modestly by 5%. In contrast, ETF-driven spot buying remained resilient, absorbing much of the sell-side liquidity.

This divergence reinforces a broader market trend: institutions are increasingly dictating price stability, while retail traders react more emotionally to regulatory headlines.

Technical Levels and Price Stability Metrics

From a technical standpoint, XRP continues to trade above its 50-day moving average, currently near $1.95. The asset also maintains a relatively strong Relative Strength Index (RSI) around 48, signaling neutral momentum rather than oversold conditions.

Volatility metrics further support the stabilization narrative. XRP’s 7-day realized volatility fell from 62% to 49% after ETF inflows accelerated, indicating that institutional participation is dampening price swings even amid policy uncertainty.

Why ETF Demand Matters Long Term

XRP ETFs play a critical role in reshaping supply dynamics. Unlike short-term speculative trading, ETF purchases typically reflect longer holding periods. Analysts estimate that if current inflow rates persist, ETFs could absorb an additional 6-8% of XRP’s liquid supply by year-end, creating sustained upward pressure on price over time.

Outlook: Policy Risk vs Structural Support

While regulatory clarity remains a key catalyst for XRP’s next major move, ETF demand has clearly emerged as a stabilizing force. Even if Senate action is delayed further, the growing institutional footprint suggests that downside risk may remain limited compared to previous cycles.

If legislative momentum resumes later this quarter, analysts project XRP could revisit the $2.40–$2.60 range. Until then, ETF inflows and technical support levels are expected to act as the primary buffers against volatility.