3 Price Lines That Will Determine XRP (Ripple)'s Fate… $1, $1.20, $0.88

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XRP (Ripple) is testing the $1 support level as institutional fund inflows plummeted by 96%, despite a 70% reduction in its monthly escrow net release. Although supply pressure eased, demand did not follow, causing the price to remain at $1.0773 and drop to a level 70.5% lower than its all-time high of $3.65703.

According to investment specialized media TradingNews on August 5 (local time), XRP fell to $1.0480 intraday on August 1 before rebounding to maintain a key support range of $1.00-$1.06. $1.15 is the first resistance level, and to break out of the downtrend structure, it must break through $1.18-$1.20 and then the $1.20-$1.25 range. Conversely, if the psychological support level of $1 collapses, $0.95 and the bottom of the long-term downward channel at $0.88 are cited as the next targets.

During the regular escrow release in August, Ripple relocked 700 million out of 1 billion XRP, reducing the net release to 300 million XRP. Compared to the previous schedule, the monthly new supply decreased by 70%, and the current value of 300 million XRP is approximately $323 million. If 1 billion XRP were released as before, it would result in a supply of $1.08 billion, but this measure reduced the supply ratio against the XRP spot ETF's average monthly demand of approximately $160 million from about 7:1 to 2:1. However, it has not been confirmed whether this reduction in release is a long-term policy.

ETF supply and demand sharply contracted. The seven XRP spot ETFs traded in the U.S. hold a total of 992.5 million XRP, with cumulative inflows reaching $1.44 billion. However, assets under management decreased to $1 billion due to price drops, resulting in an unrealized loss of approximately $440 million, or about 30%. Notably, there was no fund flow on 11 out of 22 trading days in July, and monthly inflows amounted to only $27.29 million, a 96% decrease from the initial $666 million at launch. The media evaluated that ETF funds merely served as a defensive line to support the $1 level rather than an upward catalyst.

Regulations and seasonality are also burdens. The U.S. cryptocurrency market structure bill, the Clarity Act, was removed from the U.S. Senate schedule on July 27, and its passage probability was presented as approximately 30%. XRP fell in August of 2014, 2018, and 2022, all years of U.S. midterm elections, recording an average loss of about 14%. However, the reduction in exchange holdings to a three-year low and the decrease in escrow supply are positive changes from a supply and demand perspective. The media presented a basic forecast range of $1.00-$1.20 for August, analyzing that an upward reversal would require maintaining the net escrow release of 300 million XRP, recovery of ETF funds, and Bitcoin (BTC)'s defense of the $60,000 level.

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