While the broader cryptocurrency market remains in a state of indecision, a significant divergence is unfolding for XRP. On-chain data reveals a compelling narrative of institutional accumulation occurring beneath the surface of a consolidating price. As retail interest appears to wane, professional investors are actively building positions, setting the stage for a potential supply-driven price movement.
Shrinking Exchange Reserves Amid Steady Demand
A primary factor underpinning this thesis is the dramatic reduction of XRP available on trading platforms. Since the end of 2025, exchange reserves have plummeted by approximately 57%, according to on-chain analytics. This mass withdrawal of tokens into private custody suggests a long-term holding strategy, effectively reducing immediate sell-side pressure. Historically, such a contraction in readily available supply, when met with consistent demand, creates fertile ground for price appreciation.
This demand is notably visible in the spot ETF arena. On January 26 alone, XRP-focused exchange-traded funds recorded net inflows nearing $7.8 million, with the Bitwise fund leading the purchases. This institutional buying activity has provided a foundation of stability, helping to anchor the asset’s price, which has recently hovered around the $1.90 level.
Operational Momentum and Technical Boundaries
Fundamental developments continue to bolster XRP’s utility case. Ripple’s recently announced collaboration with Jeel, the innovation arm of Saudi Arabia’s Riyad Bank, aims to modernize the kingdom’s financial infrastructure as part of its “Vision 2030” initiative. This partnership highlights the token’s real-world application beyond speculative trading.
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However, this operational progress has yet to catalyze a decisive technical breakout. The price continues to encounter stiff resistance at the psychologically significant $2.00 threshold. Conversely, the $1.80 mark has established itself as a reliable support zone. A decline in active addresses to around 45,000 further indicates a period of diminished participation from smaller, retail investors.
Regulatory Catalyst on the Horizon
The immediate trajectory may be influenced by a key regulatory event. A meeting of the U.S. Senate Committee on market structure, scheduled for Thursday, January 29, is poised to be a critical watchpoint for the sector. Clear, positive signals regarding regulatory frameworks from this session could provide the necessary catalyst. Combined with the already tightening token supply, such an outcome might generate sufficient momentum for XRP to challenge and overcome its current overhead resistance.
The current landscape presents a classic tension between supply and demand dynamics. With institutions quietly accumulating and available liquidity on exchanges drying up, XRP appears to be consolidating ahead of its next major directional move.
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