XRP has become the center of optimism in a cryptocurrency market otherwise weighed down by declining sentiment around Bitcoin and Ethereum. While major coins faced heavy losses last week, data from Santiment reveals that traders are showing unprecedented positivity toward XRP. This contrast is striking, as Bitcoin and Ether continue to experience extreme negative sentiment, particularly among retail investors who have historically driven short-term price swings. Experts note that this kind of cautious retail environment often sets the stage for a potential bounce in smaller, more favored assets like XRP.
Bitcoin ETFs saw dramatic outflows on February 4, totaling $171.50 million in a single day, with Fidelity’s FBTC experiencing an $86.44 million withdrawal alone. Grayscale’s GBTC and ARK’s ARKB also faced significant declines, while the overall market value traded across Bitcoin ETFs reached $7.14 billion. Despite these setbacks, total net assets in Bitcoin ETFs remain robust at $95.51 billion, representing 6.35% of Bitcoin’s total market capitalization. However, the negative momentum highlights a growing risk aversion among retail investors.
Ethereum ETFs mirrored this downward trend, posting $20.53 million in outflows, with each product losing between 5.60% and 5.80% of its value. Grayscale’s ETHE has now lost over $5 billion since launch, leaving Ether ETF assets at $13.04 billion, or just 4.82% of Ethereum’s market cap. The losses across these leading cryptocurrencies underscore a broader pullback in market confidence, signaling that traders are reducing exposure to higher-profile digital assets amid volatile conditions.
In contrast, XRP is defying the wider trend. ETFs tracking XRP recorded $4.83 million in inflows on February 4, pushing cumulative inflows to $1.21 billion and total net assets to $1.07 billion, equal to 1.15% of XRP’s market capitalization. Franklin’s XRPZ led the gains, followed by Bitwise and 21Shares’ TOXR product. While the total trading volume for XRP ETFs is smaller compared to Bitcoin and Ether, the direction of inflows is particularly notable as it suggests renewed confidence and interest among investors.
Options traders are also heavily favoring XRP, with calls representing 86.87% of open interest on February 4 according to Binance data. Total open call positions amount to roughly $255.3 million, compared to $38.6 million in puts. The majority of contracts are short-term, expiring on February 6, with strike prices ranging between $1.70 and $2.15. This indicates that traders are positioning for a modest near-term gain rather than a speculative breakout, reflecting a measured but bullish approach to the token.
The divergence between XRP and larger cryptocurrencies highlights an intriguing shift in market dynamics. As Bitcoin and Ether face institutional outflows and retail fear, XRP’s inflows and bullish options activity suggest that it could capture a short-term rally. For investors and analysts, this trend reinforces the importance of sentiment-driven market movements and the potential for smaller-cap or alternative digital assets to outperform during periods of broader risk aversion.
Looking ahead, XRP’s growing attention in both ETF inflows and derivatives markets could signal a recalibration of market priorities, where trader optimism may temporarily outpace that of the more established cryptocurrencies. The coming days will be critical in assessing whether this sentiment translates into sustained price momentum or remains a short-lived market anomaly.
