XRP loses momentum as ETF demand stalls and fear grips crypto markets

XRP slipped toward the $1.00 level on Tuesday as weak institutional participation in U.S.-listed spot ETFs compounded broader risk-off sentiment across crypto markets. A daily close below $1.00 could deepen the selloff and materially reduce the odds of a sustained recovery.

What this means for GCC investors

GCC investors seeking XRP exposure through regulated, exchange-listed instruments have limited local options — but the weakness in U.S. spot XRP ETFs is a direct signal worth monitoring. The 21Shares Bitcoin ETP (ABTC), listed on the SIX Swiss Exchange and accessible to regional investors, offers a benchmark for gauging institutional crypto appetite more broadly, even if XRP-specific products remain predominantly U.S.-domiciled.

The Crypto Fear & Greed Index sitting at 29 on Tuesday — down from 30 the prior day — reinforces the case for caution on any high-beta crypto position. GCC investors with Sharia-compliant mandates should note that most XRP ETF structures have not received formal Sharia certification, adding another layer of screening complexity.

ETF flows and derivatives data tell a mixed story

U.S.-listed spot XRP ETFs posted thin trading activity on both Friday and Monday, reflecting continued weak institutional engagement. Cumulative inflows held steady at $1.51 billion, with assets under management near $950 million — figures that indicate existing holders are not exiting aggressively, but new capital is not arriving either.

The more constructive signal comes from derivatives markets. Open interest in XRP perpetual futures rose to 2.74 billion XRP on Tuesday, up from 2.62 billion the prior day. Measured from August 5, when open interest averaged 2.12 billion XRP, that represents a 23% increase. If this trend continues, rising derivatives demand could support a directional shift and help XRP reclaim and hold above $1.00.

Geopolitical risk is the macro overhang

The broader fear reading reflects genuine macro uncertainty, not just crypto-specific sentiment. Iran's National Security Council Secretary Mohsen Rezaei publicly conditioned the reopening of the Strait of Hormuz on the U.S. releasing frozen Iranian assets abroad. Oil markets on Tuesday were simultaneously weighing contradictory signals on whether a U.S.-Iran agreement was within reach, following Pakistani Defence Minister Khawaja Asif's comments that a peace arrangement was back on track.

Pakistan had brokered a temporary U.S.-Iran deal in June, which collapsed quickly and led to renewed fighting around the Strait of Hormuz. President Donald Trump escalated his position this week by demanding Iran pay compensation to the United States. Strait of Hormuz tensions carry outsized relevance for GCC investors given the region's direct exposure to energy flows and market sentiment.

What Could be Next

A confirmed daily close above $1.00 on elevated derivatives open interest would be the clearest near-term signal that XRP's recovery is gaining structural backing — watch that level into the end of the week alongside any breakthrough in U.S.-Iran negotiations that could shift broader risk appetite.