The recent market divergence pattern is indeed interesting. ETH short positions have been wiped out extensively, while XRP has surged forward by leveraging the momentum. This fragmented market trend is worth a deep dive.

Many are still debating whether to chase XRP, but what truly matters is the change in the underlying capital flow. The inflow of funds into the US spot XRP ETF has already surpassed $1 billion, with $48 million absorbed on January 5 alone. This is not the scale of retail scattered purchases but a genuine institutional capital entry signal.

Even more noteworthy is the change on the supply side. The amount of XRP available for trading on exchanges has fallen to multi-year lows, indicating a typical supply tightness. When large-scale capital enters and supply is limited, you can understand why this rally is so fierce. This is not a market movement driven by short-term speculation.

Ripple is also pushing forward with key initiatives—such as the application for a banking license and the Ripple USD stablecoin plan. These measures point in the same direction: gradually integrating XRP into the traditional financial system. For institutional investors, such policy-level positive signals are the most convincing. Things that can attract institutions to invest $1 billion are certainly not just market hype.

From a technical perspective, the current situation is quite interesting. Although some indicators show overbought characteristics, overbought conditions do not necessarily mean a top is in. The real focus should be on the sustainability of capital and the defense of key support levels—these two signals can truly reflect the possible future trend.