XRP Drops 20% After ETF Launch But Here’s the Good News

Analyst Zach Rector has drawn the attention of the XRP community with his interpretation of the digital asset's recent price decline.

Rector shared a chart illustrating XRP's recent 20% drop, which he correlated with the recent launches of spot ETFs. He described the fall as a direct reaction to these launches but expressed optimism that XRP will soon trend in a different direction.

He further stated that he has increased his own long position, noting that "this is now officially a 20% 'sell the news' pullback." His accompanying chart depicted XRP moving towards key technical support levels. Experts, however, believe these ETFs are significant for XRP's price action and anticipate a reversal in the near future.

Lessons From Bitcoin ETFs

Rector highlighted Bitcoin's trajectory as a precedent for how traders might react following a major product release. He drew a parallel between XRP's current situation and the period following the introduction of Bitcoin ETFs. He reminded traders that, in Bitcoin's case, this period represented "the best time to buy in the last 2 years."

The first spot Bitcoin ETFs began trading in January 2024. Bitcoin opened that month at over $42,000 and subsequently dipped to $38,500 shortly after the launch. The market eventually absorbed this dip and began an upward trend. Bitcoin later reached a new all-time high of $73,700 in March. This sequence is frequently cited by traders as an example of how a sharp price drop can precede a significant advance.

Many XRP supporters are now referencing this historical event. They are comparing the current pullback to the phase that followed the Bitcoin ETF approval. Their argument suggests that the present weakness does not necessarily preclude future strength.

Market Response and Future Outlook

XRP has not experienced a significant rally in the wake of the recent ETF developments. It has faced challenges in maintaining gains and continues to trade below pre-announcement levels. This lack of immediate upward momentum has impacted short-term market sentiment.

Some traders are now awaiting clearer signals regarding volume and liquidity. Others view the current decline as an initial phase rather than a definitive statement on the long-term impact of these new investment vehicles. With more ETFs expected to enter the market in the coming weeks, many observers see XRP's current price levels as a potential buying opportunity.

The introduction of additional ETFs could provide investors with more avenues to gain exposure to XRP. The availability of these new financial products might broaden market access. The upcoming trading period will be crucial in determining whether the current pullback proves to be a temporary setback or the foundation for a sustained upward movement.