The new year has presented a challenging trading environment for XRP. As Bitcoin consolidates near the $87,000 level, the digital asset has struggled to gain momentum. On Thursday, its price hovered around $1.85, confronting the significant psychological resistance at $1.90. This stagnation coincides with a recurring market event: the scheduled release of 1 billion XRP from escrow.

Institutional Demand Provides a Counterweight

Despite the immediate supply pressure, underlying demand indicators reveal a more complex picture. Institutional interest appears robust. U.S. spot XRP ETFs now hold $1.24 billion in assets. A notable inflow of over $15 million occurred on December 30 alone. These ETF providers collectively hold approximately 1.12% of XRP’s total market capitalization, representing a consistent source of demand that can help absorb selling pressure.

Furthermore, exchange reserves have plummeted to a multi-year low, dropping below 1.5 billion tokens. This figure marks a dramatic decline from roughly 4 billion tokens held on exchanges a year ago. The migration of assets to private cold wallets suggests accumulation by long-term holders. A reduced readily available supply on trading platforms can alleviate potential sell-side pressure and may set the stage for a supply shock in the medium term.

The Monthly Unlock: A Recurring Hurdle

The primary short-term headwind stems from the XRP Ledger’s automated monthly escrow release, executed precisely at midnight. This event unlocked 1 billion tokens, valued at approximately $1.84 billion. Historical patterns show that Ripple typically returns 60% to 80% of these tokens to new escrow contracts. However, the remaining portion enters the circulating supply, creating a period of market uncertainty each month.

Should investors sell immediately? Or is it worth buying XRP?

This sentiment was compounded by controversial data within transaction records, which hinted at aggressive selling strategies planned for 2026. The authenticity and intent of this note—whether official or sarcastic—remain unverified. Nevertheless, it contributed to palpable unease among retail investors.

Regulatory Developments Loom Large

The future trajectory for XRP remains heavily tied to regulatory clarity. A potential catalyst is the anticipated Senate discussion of the CLARITY Act later this month. This legislation aims to definitively distinguish securities from commodities under U.S. law. A favorable outcome could eliminate lingering legal uncertainties for digital assets like XRP, potentially unlocking a new wave of institutional investment.

The immediate technical focus rests on the $1.80 support level. Market observers are watching to see if buyers can successfully absorb the additional supply from the escrow release. The current landscape is defined by contradiction: sharply declining exchange balances and steady ETF inflows signal accumulation, while the timing of the sizable monthly unlock exerts undeniable downward pressure on the price.

Ad

XRP Stock: Buy or Sell?! New XRP Analysis from January 8 delivers the answer:

The latest XRP figures speak for themselves: Urgent action needed for XRP investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from January 8.

XRP: Buy or sell? Read more here...