XRP’s $2.16B long bet looks risky – But THIS could change the setup

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Analytics

Going long on Ripple is not the best idea at this stage of the cycle.

From a technical perspective, $XRP is already down more than 6% this month and is nowhere close to realizing its gains from July. In contrast, Ethereum has gained a solid 1.7% this month, making it clear that $XRP is not attracting big institutional flows. With that said, the chart below becomes even more significant.

Specifically, almost $2.16 billion in fresh long positions have been opened recently, fueling frenzied speculation. Given the technical setup described above, this development makes $XRP highly vulnerable to a massive long liquidity sweep.

Interestingly, Ripple [$XRP] kicked off the week by breaking below the critical $1 level, adding more pressure to the long-heavy setup. If bulls fail to reclaim $1, the breakdown could open the door to deeper downside, a setup that can’t be ignored given the weaker institutional demand.

According to the SoSoValue, $XRP ETFs have seen just over $3 million in net inflows so far in August, while Ethereum ETFs have pulled in over $2. That gap shows how much stronger the current capital rotation into $ETH has been compared to $XRP.

Taken together, the combination of weak technical performance and institutional flows suggests that the large $2.16 billion long bet on $XRP looks like a risky trade. If $XRP fails to reclaim $1, those leveraged longs could quickly turn into a short-covering squeeze, raising the question: Is Ripple on track for a break below $0.98?

$XRP bulls take a risky bet

One thing to consider when looking at the current bet is the timing of the move.

Notably, while $XRP’s technical and institutional setup looks weak, some on-chain signals and liquidity flows are pointing to another direction. One of them is the $XRP/$ETH ratio, which analysts expect to rebound based on key technical signals. Notably, this is where the chart below begins to hold weight.

According to Token Terminal, $RLUSD was the fastest-growing asset over the past seven days, adding $132 million, while Ripple was the faster-growing issuer, also adding $132 million. This suggests that $RLUSD supply continues to expand, even as $XRP struggles to gain momentum. This divergence is worth watching.

Notably, the rising $RLUSD supply and growing on-chain activity point to stronger network engagement across the $XRP Ledger. That puts $XRP in a better position if the broader market flips back to risk-on. If liquidity continues to build while the $XRP/$ETH ratio begins to recover, the current weakness could turn into a stronger rebound setup.

In this context, while $2.16 billion in long positions might seem too risky, the overall setup suggests that $XRP bulls may have more conviction behind the trade than the current price action suggests.