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XRP ‘Coiling’ for a Breakout? Liquidity Patterns Mirror Previous Explosive Rallies

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XRP 'Coiling' for a Breakout? Liquidity Patterns Mirror Previous Explosive Rallies


Historical data depicts XRP rallies followed periods of tight liquidity, though sustained moves required expanding USD market depth.

XRP’s market structure is showing signs of renewed liquidity compression, as evidenced by exchange flows and on-chain liquidity conditions aligning in a way that has historically preceded increased volatility.

Data tracking Binance exchange inflows revealed that large deposits previously surged ahead of a major XRP rally, a pattern often associated with rising volatility rather than immediate selling.

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Fragile Market Setup

CryptoQuant explained that while exchange inflows are commonly interpreted as potential sell-side pressure, past behavior indicates that they can also mark positioning phases before sharp price expansions. During the earlier rally period, USD liquidity, which represents the depth of capital supporting XRP markets, expanded significantly. This allowed prices to support upward momentum despite high volatility.

Current conditions, however, differ, as USD liquidity has been declining. Such a setting points to thinner market depth compared with prior expansion phases. Reduced depth typically increases sensitivity to flows and amplifies price reactions.

On the supply side, the amount of XRP actively available for trading dropped sharply ahead of the previous breakout, a period that marked the start of the rally. That same pattern is beginning to reappear, as XRP liquidity is trending lower once again. In past cycles, similar setups, where exchange inflows spiked while overall liquidity tightened, were followed by sharp increases in price volatility.

Whether those moves turned into steady trends depended largely on how much capital entered the market. Right now, exchange inflows remain relatively contained, but liquidity on both the USD and XRP side is shrinking. This points to a thinner market than during earlier expansion phases, where even modest changes in buying or selling pressure can have an outsized impact on price.

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With less liquidity to absorb trades, XRP’s price may react more quickly if activity picks up, which makes market conditions even more fragile than they appear on the surface.

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XRP Most Talked-About Asset After Bitcoin

Even against this backdrop, investor interest in the asset has not faded. As recently reported by CryptoPotato, XRP has emerged as the second-most talked-about digital asset after Bitcoin, as per Grayscale. The asset manager observed that the crypto continues to attract significant attention due to steady interest from its user base and investors, even as market sentiment remains cautious.

Speaking during Ripple Community Day, Grayscale’s Head of Product and Research, Rayhaneh Sharif-Askary, described XRP as having a large and committed community, and added that client inquiries about the token remain consistently high. Advisors at Grayscale have reported that the token frequently ranks just behind Bitcoin in terms of discussion volume.

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Crypto World

Bitcoin Spikes as US Supreme Court Strikes Down Trump Tariffs

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Bitcoin Spikes as US Supreme Court Strikes Down Trump Tariffs

In a landmark 6–3 decision, the Supreme Court of the United States has ruled that President Donald Trump’s sweeping global tariffs were illegal, delivering a sharp blow to one of the White House’s core economic policies.

The decision immediately lifted risk appetite across financial markets — including crypto — though traders remain cautious about what comes next.

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Bitcoin ETFs Near Five-Week Outflow Streak With $404M Outflows

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Bitcoin ETFs Near Five-Week Outflow Streak With $404M Outflows

Selling pressure in US-listed spot Bitcoin ETFs continued Thursday, with analysts noting the cryptocurrency is on track for one of its worst yearly starts.

Spot Bitcoin (BTC) ETFs saw $165.8 million in outflows Thursday, bringing weekly losses to $403.9 million, according to SoSoValue data.

The redemptions moved the funds closer to a possible five-week outflow streak, with year-to-date (YTD) losses totaling $2.7 billion.

Daily flows in US spot Bitcoin ETFs this week. Source: SoSoValue

Trading activity continued to shrink, falling 21% over the week and reaching its lowest levels since late December, signaling weakening investor activity.

Despite $53.9 billion in cumulative net inflows, analysts, including DropsTab, noted that 2026 is shaping up to be “one of the worst yearly starts in Bitcoin’s history,” with BTC prices down about 22% year-to-date, according to TradingView data.

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BlackRock’s IBIT leads losses with $368 million in outflows this week

BlackRock’s iShares Bitcoin Trust ETF (IBIT) accounted for the bulk of outflows this week, totaling $368 million, according to Farside data.

Other US-listed spot Bitcoin ETFs saw little or no activity this week, aside from about $50 million in outflows from the Fidelity Wise Origin Bitcoin Fund (FBTC) on Wednesday.

Daily flows in US spot Bitcoin ETFs by issuer. Source: Farside.co.uk

Some major financial institutions reported reducing IBIT exposure earlier this week, with Brevan Howard cutting its holding in the fund by as much as 85% in the fourth quarter of 2025.

Bitcoin set for one of its worst yearly starts

The ongoing outflows from Bitcoin ETFs coincide with weakening investor sentiment, as multiple sources point to unusually low BTC price levels compared to previous cycles.

Drops Analytics highlighted Bitcoin’s price in the context of halving — an event that reduces BTC’s block reward once every four years and is typically followed by price surges in the years that follow.

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Analysis, Bitcoin Price, Ethereum ETF, Bitcoin ETF
Source: Drops Analytics

“Almost two years later, BTC trades around $66,000 — nearly the same level as during the April 2024 halving,” Drops Analytics said in a Telegram post on Thursday.

Related: Quantum fears aren’t behind Bitcoin’s 46% drop, says developer

“This has never happened before. In previous cycles, BTC was already three to 10 times above halving levels by now,” it added.

According to Checkonchain data, Bitcoin is off to its worst yearly start on record, 50 days into 2026, surpassing previous down years, including 2018.

Magazine: Did a Hong Kong fund kill Bitcoin? Bithumb’s ‘phantom’ BTC: Asia Express

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