XRP’s price behavior over recent months has highlighted a growing disconnect between institutional activity and public market trading.

While exchange-traded products linked to XRP have attracted substantial capital, that demand has not translated into higher spot prices, largely due to where and how transactions are taking place.

Market analysts say the explanation lies in the mechanics of price discovery rather than a lack of interest.

Public markets, not ETFs, set the price

XRP’s market price is determined on centralized exchanges, not through ETF transactions. Much of the recent ETF-related buying has occurred through over-the-counter channels, where large blocks of XRP can change hands without affecting order books.

As a result, ETF inflows have increased ownership exposure without creating visible buying pressure on exchanges. At the same time, XRP has faced consistent selling activity in public markets, preventing upward price movement.

Analyst Zach Rector noted that when institutional demand remains off-exchange, it can coexist with flat or declining prices on trading platforms where retail activity dominates.

Selling pressure has matched institutional demand

Data from November shows that exchange-based selling nearly matched ETF-related inflows during the same period. While funds flowed into XRP-linked investment products, a similar value of XRP was sold on centralized exchanges as holders converted positions into cash or stablecoins.

This dynamic effectively neutralized upward momentum. According to Rector, price movement typically accelerates only when institutional flows begin interacting directly with exchange liquidity rather than remaining isolated in private markets.

XRP’s volatility history suggests asymmetric moves

Despite recent stagnation, historical data indicates that XRP remains capable of sharp revaluations when conditions shift. In previous periods, relatively modest changes in net demand resulted in large swings in market capitalization.

Rector pointed out that XRP has experienced both rapid expansions and contractions within short time frames, depending on whether flows favored accumulation or distribution. This pattern suggests that once selling pressure eases, price adjustments can happen quickly.

Downside scenarios seen as limited by liquidity

From a downside perspective, Rector argued that current market structure makes a deep retracement unlikely without an external shock. Liquidity conditions have improved, and long-term holders appear willing to accumulate during pullbacks rather than exit positions.

He added that buying interest is already visible near established support zones, creating friction against further declines. While short-term volatility remains possible, sustained moves toward previous cycle lows would require a significant deterioration in market conditions.

Market focus remains on flow migration

According to analysts, the key variable to watch is whether ETF-related demand begins flowing into exchange markets. If that shift occurs, the balance between supply and demand would change materially, potentially altering XRP’s price trajectory.

Until then, XRP’s price may continue to lag headlines, reflecting the separation between institutional positioning and retail-driven price discovery.