Going long on Ripple is not the best idea at this stage of the cycle.
From a technical perspective, XRP is already down more than 6% this month and is nowhere close to realizing its gains from July. In contrast, Ethereum has gained a solid 1.7% this month, making it clear that XRP is not attracting big institutional flows. With that said, the chart below becomes even more significant.
Specifically, almost $2.16 billion in fresh long positions have been opened recently, fueling frenzied speculation. Given the technical setup described above, this development makes XRP highly vulnerable to a massive long liquidity sweep.
Interestingly, Ripple [XRP] kicked off the week by breaking below the critical $1 level, adding more pressure to the long-heavy setup. If bulls fail to reclaim $1, the breakdown could open the door to deeper downside, a setup that can’t be ignored given the weaker institutional demand.
According to the SoSoValue, XRP ETFs have seen just over $3 million in net inflows so far in August, while Ethereum ETFs have pulled in over $2. That gap shows how much stronger the current capital rotation into ETH has been compared to XRP.
Taken together, the combination of weak technical performance and institutional flows suggests that the large $2.16 billion long bet on XRP looks like a risky trade. If XRP fails to reclaim $1, those leveraged longs could quickly turn into a short-covering squeeze, raising the question: Is Ripple on track for a break below $0.98?
XRP bulls take a risky bet
One thing to consider when looking at the current bet is the timing of the move.
Notably, while XRP’s technical and institutional setup looks weak, some on-chain signals and liquidity flows are pointing to another direction. One of them is the XRP/ETH ratio, which analysts expect to rebound based on key technical signals. Notably, this is where the chart below begins to hold weight.
According to Token Terminal, RLUSD was the fastest-growing asset over the past seven days, adding $132 million, while Ripple was the faster-growing issuer, also adding $132 million. This suggests that RLUSD supply continues to expand, even as XRP struggles to gain momentum. This divergence is worth watching.
Notably, the rising RLUSD supply and growing on-chain activity point to stronger network engagement across the XRP Ledger. That puts XRP in a better position if the broader market flips back to risk-on. If liquidity continues to build while the XRP/ETH ratio begins to recover, the current weakness could turn into a stronger rebound setup.
In this context, while $2.16 billion in long positions might seem too risky, the overall setup suggests that XRP bulls may have more conviction behind the trade than the current price action suggests.
Final Summary
- XRP’s long-squeeze risk has intensified, with over $2.16 billion in long positions recently added.
- Could XRP bulls be making a strategic bet?
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