**Does XRP’s ETF Optimism Guarantee a Sustained Rally?**
While optimism surrounding XRP’s potential ETF approval may provide temporary relief, it does not guarantee a sustained rally. Weak network growth and negative address activity divergence continue to limit lasting bullish momentum for the cryptocurrency.
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### What Are Recent Open Interest and On-Chain Metrics Indicating About XRP?
Recent data shows a decline in Open Interest (OI) along with subdued on-chain activity, indicating a cautious stance among traders. This hesitance reflects insufficient speculative support to drive a strong and sustainable rally in XRP’s price.
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### Evolving XRP Spot ETF Landscape
The XRP spot ETF scene is rapidly developing. Franklin Templeton’s filing has been extended into November, signaling ongoing regulatory processes. Meanwhile, the REX-Osprey XRPR ETF, which launched on September 18th, recorded an impressive $37.7 million in trading volume on its first day—making it one of the largest ETF debuts of the year.
Despite this positive news, the Spot Taker Cumulative Volume Delta (90-day) continues to show sellers dominating the market. This suggests that profit-taking and heavy sell pressure remain entrenched. Although there were intermittent bursts of buyer strength during the summer, sellers quickly regained control, leaving momentum biased against bulls. This imbalance underscores the short-term risks XRP faces, where ETF optimism must contend with a market struggling to generate decisive buyer inflows and break sustained downward pressure.
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### Network Growth and Transaction Activity Fall Short
On-chain signals remain muted. XRP’s network growth has slid to just 4,849 active addresses, while transaction counts hover around 617,000—both figures are near their recent lows. These metrics point to muted adoption and weaker user engagement.
Historically, subdued network activity has limited XRP’s ability to sustain price rallies, even amid broader market optimism. While ETF approval may offer temporary price boosts, structural growth depends on consistent network expansion and higher transaction volumes. Without meaningful new participants joining the ecosystem, underlying weaknesses threaten to dampen bullish momentum despite favorable regulatory catalysts.
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### Is Declining Address Activity a Warning Sign?
Daily Active Addresses (DAA) divergence further highlights XRP’s fragile momentum. Participation metrics have been lagging behind price action, signaling weakening organic growth.
The persistent negative DAA divergence suggests traders remain hesitant to stay engaged, as network adoption fails to gain traction. In such an environment, rallies often struggle to sustain because price increases aren’t supported by a growing base of active users. As activity stagnates, XRP risks losing alignment between demand and valuation, making ETF-driven optimism appear more speculative than fundamentally supported. This address divergence continues to cast doubt on XRP’s ability to build lasting bullish traction.
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### Open Interest Slides as Traders Reduce Exposure
Open Interest in XRP derivatives dropped by 3.34%, settling around $7.33 billion. This decline highlights reduced speculative positioning across futures markets, signaling that traders are exercising caution rather than conviction.
While lower exposure may help reduce short-term volatility, it also indicates waning appetite for risk-taking and less leverage supporting potential rallies. Historically, significant XRP uptrends have aligned with rising Open Interest, underscoring the importance of derivative market activity. Current trends, however, point toward fading speculative strength even as ETF anticipation grows.
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### Can ETF Optimism Offset On-Chain Weakness?
Despite increasing speculation around XRP’s ETF approval, several headwinds remain dominant: seller pressure, subdued network activity, negative address divergence, and declining Open Interest.
For XRP to mount a sustainable rally, investor enthusiasm must be matched by stronger on-chain growth rather than relying solely on regulatory developments. Although ETF approval could spark temporary price relief, without renewed activity across the network and derivatives markets, upside momentum risks quickly fading.
The evidence suggests XRP requires deeper structural participation and broader ecosystem engagement before ETF optimism can translate into lasting gains.
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**In summary, while XRP’s ETF prospects provide a promising catalyst, fundamental challenges in network growth and trader engagement underscore the risks of expecting a sustained rally based solely on regulatory optimism.**
https://ambcrypto.com/xrp-etf-hype-surges-yet-these-on-chain-metrics-signal-caution/
