XRP Price Faces Downside Risk Despite Rising ETF Inflows and RLUSD Growth

XRP (CRYPTO: XRP) has slumped over the past four weeks, falling from its September high of $1.6562 to the current $1.2775. The retreat has coincided with the ongoing crypto market sell-off, which has also hit Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and other altcoins.

XRP ETF Inflows and Ripple USD Assets are Rising

XRP’s retreat is happening even as American retail and institutional investors continue buying its ETFs. SoSoValue data shows these funds have added more than $14.5 million in assets this month. In contrast, spot Bitcoin and Ethereum funds have lost $174 million and $1.1 billion, respectively. That suggests demand for XRP ETFs is holding up better than for its larger rivals.

XRP ETFs have had just one month of outflows since they were launched in November last year. These funds shed over $31 million in assets in March this year. In total, the funds hold $1.48 billion in assets, with Bitwise’s XRP and Franklin’s XRPZ having over $542 million and $398 million, respectively. 

XRP price has wavered even as demand for Ripple USD (RLUSD) stablecoin continues rising. The stablecoin’s market capitalization has jumped to $2.46 billion from $894 million in the same period last year. It is nearing its all-time high of $2.56 billion. In contrast, USD Coin (CRYPTO: USDC) and USDT (CRYPTO: USDT) have lost their momentum. USDC’s market cap has fallen from over $79 billion earlier this year to $72 billion today. 

XRP and other cryptocurrencies are struggling because of the ongoing macro environment, with oil prices rising to $117. Rising oil prices mean that inflation will remain at an elevated level in the foreseeable future, forcing the Federal Reserve to hike interest rates. 

XRP Price Has Formed a Double-Top Pattern

Technicals suggest that XRP has formed a double-top pattern at $1.6535 and a neckline at $1.2520. This pattern usually leads to a reversal, which is usually confirmed when it drops below the neckline. 

XRP has dropped below the 50-day moving average and the Strong pivot reverse level of the Murrey Math Lines. Therefore, the coin will likely continue falling, with the next target to watch being the Strong, Pivot, reverse level of the Murrey Math Lines tool at $1.00. This view will be confirmed if it drops below $1.2520.

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