In recent weeks, XRP has experienced notable fluctuations, with its price dipping approximately 4% this month. This decline coincides with the first recorded net outflows from XRP exchange-traded funds (ETFs) since their inception in November 2025. Despite these developments, underlying market indicators suggest a complex interplay between short-term profit-taking and long-term investor confidence.
Analyzing the First XRP ETF Outflows
On January 7, 2026, XRP ETFs witnessed their first net outflow, totaling around $40.8 million. This marked a significant shift after a consistent eight-week streak of inflows that had accumulated over $1.5 billion. The majority of these outflows were attributed to 21Shares’ TOXR, which saw redemptions amounting to $47.25 million. In contrast, other funds like Bitwise and Grayscale recorded modest inflows, indicating that the outflow was not uniform across all XRP ETFs.
Such outflows often reflect short-term profit-taking strategies by investors, especially following substantial price rallies. In the first week of January, XRP’s price surged approximately 25%, reaching highs near $2.40. This rapid appreciation likely prompted some investors to realize gains, leading to the observed ETF redemptions.
Price Movements and Support Levels
Following the ETF outflows, XRP’s price experienced a pullback, testing critical support zones. The $1.85–$1.90 range emerged as a significant support level, with the asset demonstrating resilience by maintaining its position above this threshold. Historical data indicates that this range has previously acted as a demand floor, suggesting strong buying interest at these levels.
Technical analysis reveals a descending triangle pattern on the weekly chart, characterized by higher lows and moderate trading volumes. This pattern often signifies accumulation phases, where investors consolidate positions in anticipation of future price movements. The ability of XRP to hold above the $1.85 support level amidst market volatility underscores the asset’s underlying strength.
Institutional Interest and Whale Activity
Despite the recent outflows, institutional interest in XRP remains robust. U.S.-listed spot XRP ETFs have registered net inflows of $91.72 million this month, indicating sustained demand from institutional investors. This trend contrasts with the performance of Bitcoin ETFs, which have seen significant redemptions in the same period.
On-chain data further supports this positive outlook. The number of wallets holding at least 1 million XRP has increased for the first time since September 2025, rising by 42 to a total of 2,016. This uptick in large wallet holdings suggests that ‘whales’—entities holding substantial amounts of cryptocurrency—are accumulating XRP, potentially signaling confidence in its long-term prospects.
Market Outlook and Investor Sentiment
The recent developments in XRP’s market dynamics highlight the nuanced interplay between short-term trading behaviors and long-term investment strategies. While the initial ETF outflows and price corrections may raise concerns, the resilience of key support levels and continued institutional interest provide a counterbalance to bearish sentiments.
Investors should monitor these trends closely, considering both technical indicators and on-chain data to inform their decisions. The increase in large wallet holdings and sustained ETF inflows suggest that, despite recent volatility, the foundational aspects of XRP’s market remain strong. As always, a balanced approach that accounts for both immediate market movements and underlying fundamentals will be crucial in navigating the evolving landscape of XRP investments.
