XRP Rally Faces Headwinds as Spot Trading Activity Dries Up, Futures Growth Dominates
Key Summary
XRP spot trading activity has plummeted, with centralized exchanges experiencing a $1.943 billion decline in combined spot volume between August 26 and October 11. Despite this, futures trading has taken on a larger role, and XRP ETFs continue to attract investors, posting a fresh record of $1.8 billion in cumulative net inflows. This has raised concerns about the sustainability of the current rally, with experts warning that spot trading activity may not recover until entry prices drop.
XRP Spot Trading Activity Plummets
Spot trading activity for XRP has sharply declined in recent weeks, with a $1.943 billion drop in combined spot volume across centralized exchanges between August 26 and October 11. Binance, one of the largest exchanges, saw its seven-day average spot volume drop from $597 million to $168 million, a decline of $429 million.
Centralized Exchanges See Larger Decline
Other centralized exchanges, however, saw a much larger fall in combined volume, with a reduction of $1.514 billion, 3.53 times greater than the decline recorded on Binance.
Futures Trading Takes Over
The weakness in spot trading activity is also visible in Binance's spot-to-futures volume ratio, which fell from 31% on September 26 to 12.7% on October 11. At current levels, futures volume is roughly 7.9 times spot volume, a significant increase from 15 days earlier.
XRP ETFs Continue to Attract Investors
Despite the decline in spot trading activity, XRP ETFs continue to attract investors, posting a fresh record of $1.8 billion in cumulative net inflows. The funds recorded $11.31 million in net inflows last week, with inflows coming on October 6 and October 8.
Turning Point Looms
A possible turning point for XRP could come from Evernorth, which is set to begin trading on Nasdaq under the ticker XRPN on October 12th. The company has completed its business combination with Armada Acquisition Corp. II and has raised over $1 billion through the deal and related private placements.
Evernorth Plans to Invest in XRP Ecosystem
Evernorth has announced plans to invest in institutional yield strategies, on-chain credit, infrastructure, and other projects across the XRP ecosystem. This could provide a boost to XRP prices and attract more investors to the market.