Ripple’s XRP entered a deeper corrective phase on Tuesday after breaking below the critical $2.07 support zone, a level that had held multiple intraday retests earlier in the week. The move comes despite accelerating institutional participation, with spot XRP ETFs surpassing $850 million in inflows since launching in mid-November — one of the strongest altcoin ETF debuts on record.

The divergence between strengthening fundamental demand and weakening technical structure has sharpened trader focus on the next major support at $2.05, a level several analysts warn may now be at risk.

Institutional Demand Builds, but Market Liquidity Remains Thin

XRP continues to face a split environment:

ETF flows remain robust, with long-horizon capital steadily accumulating exposure.

Speculative activity, however, has cooled, with declining open interest across major venues signaling a more risk-off posture.

Bitcoin’s inability to reclaim key weekly levels has added pressure across the altcoin complex.

This mismatch — strong institutional inflows versus restrained retail and derivatives participation — has left XRP more vulnerable to technical breakdowns, despite improving fundamentals.