The digital asset XRP appears to be stabilizing following a challenging week that saw its value drop by nearly 15%. Currently trading around $2.05, the cryptocurrency has recorded losses for seven consecutive days. This downturn was primarily triggered by a postponement of key digital asset legislation in the United States. However, beneath the surface of red price charts, a different narrative is emerging from network metrics and institutional behavior, suggesting a potential bottom may be forming.
Regulatory Delays and Long-Term Clarity
The immediate catalyst for the sell-off was a decision by the U.S. Senate Committee on Agriculture to delay consideration of the proposed Market Structure Bill. This legislative holdup has injected short-term uncertainty into the market. Analysts note, however, that the broader regulatory outlook for XRP remains positive following the resolution of its legal dispute with the SEC in August 2025. This foundational clarity continues to support the asset’s long-term thesis despite recent price volatility.
The Battle for $2: A Key Psychological Level
XRP’s retreat from highs above $2.40 in early January to its current level near $2.06 has brought the psychologically significant $2 threshold into sharp focus. This level has become a zone of contention. Throughout the past week, the price has repeatedly bounced between $2.03 and $2.08, demonstrating notable buyer interest. A concurrent significant increase in trading volume indicates that many market participants are viewing the price weakness as a buying opportunity. Data reveals that wallets holding large XRP balances have been particularly active accumulators, pointing to confidence from long-term oriented investors.
Diverging Signals from On-Chain Metrics
A closer look at blockchain data presents a mixed picture. On one hand, the XRP Ledger recently processed its highest number of payment transactions in approximately 180 days, reaching about 1.45 million per day. This surge suggests growing utility for the network beyond mere speculation. Furthermore, XRP reserves held on major exchanges like Binance have fallen to their lowest levels since January 2024—a classic on-chain signal that points to accumulation and a shift toward self-custody by holders.
Should investors sell immediately? Or is it worth buying XRP?
Contrasting this positive data, the number of active addresses on the network declined by 17.5% last week to roughly 42,600. Separate reports highlighted a temporary, weekend plunge in on-chain activity of 99%, attributed to a pause in institutional transaction processing. This divergence—rising payment volume alongside falling active addresses—implies that institutional players may be increasing their usage intensity, while interest from retail participants has waned.
Strong Fundamentals Amid Price Weakness
The fundamental case for XRP continues to strengthen through corporate and regulatory developments. Ripple secured a major milestone in December 2025 by obtaining an Electronic Money Institution (EMI) license from the UK’s Financial Conduct Authority (FCA), paving the way for its payment network’s expansion in Britain. Concurrently, the company is actively working to clarify the legal distinction between a securities offering and the underlying digital token, as detailed in a letter to the SEC dated January 9, 2026.
The successful launch of XRP spot ETFs in November 2025 further underscores institutional confidence. These products have attracted over $1.13 billion in inflows to date, a powerful vote of confidence that stands in stark contrast to the asset’s recent short-term price performance. This dichotomy highlights the current disconnect between strengthening fundamentals and transient market sentiment.
Technical Outlook and Price Trajectories
From a technical analysis perspective, the $2.00 support level remains critical. A sustained break below this floor could see the price target the $1.90 region. For bullish momentum to regain control, buyers must first reclaim the $2.40 level. Achieving this would open the path toward longer-term price targets in the $3.00 range—a scenario some market researchers deem plausible for 2026. The coming days will be crucial in determining whether the recent accumulation around $2.05 is sufficient to halt the seven-day losing streak and establish a durable base for recovery.
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