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Guavy AI Editorial Team••Sentiment: -2•Clout: 62

XRP's Price Stagnation: What's Holding It Back

BTCXRP

The cryptocurrency market has been witnessing a mixed trend lately, with some assets gaining while others losing value. One such asset is XRP, which despite having solid fundamentals, has been struggling to move past the $1.30-$1.50 range. The question on everyone's mind is: what is holding back XRP?

One of the primary reasons for XRP's stagnation is its strong correlation with Bitcoin. According to data, XRP tracks Bitcoin roughly 80% of the time and swings about 1.8 times more in either direction when it moves. When Bitcoin fell from $74,000 to $70,000 after the Fed's March 18 decision, XRP followed suit and dropped 10%, while BTC gave up around 5%. This strong correlation means that if Bitcoin is falling, XRP will likely fall as well.

Another factor contributing to XRP's struggles is underwater holders selling into every rally. According to Glassnode data, approximately 60% of XRP's circulating supply—around 36.8 billion tokens—is held at a cost basis above the current price. The average cost basis across all holders sits around $1.44, which is close to where XRP has been trading most of March. Every time the XRP price approaches this level, holders who've been sitting on losses for weeks or months sell to break even and exit, creating a ceiling at $1.45.

The third factor holding back XRP is the low inflows in XRP ETFs. Despite recording 43 consecutive days of positive inflows initially, weekly inflows have since collapsed from over $200 million at launch to under $2 million in March. The funds posted net outflows of $28 million the same week Bitcoin ETFs pulled in $767 million. This lack of institutional participation is a concern for XRP's price growth.

For the XRP price to break out of its current range, all three factors need to work together. One potential catalyst that could trigger this change is the Clarity Act, which is targeting a markup in the second half of April with passage odds around 72%. If it passes, XRP's commodity status becomes permanent federal law, unlocking more institutional adoption and giving banks a reason to settle in XRP.