While the broader cryptocurrency market struggled for direction on Tuesday, XRP demonstrated notable strength, decoupling from the mixed sentiment. The token’s advance is being fueled by a powerful combination of record-setting ETF inflows and a significant reduction of available tokens on major trading exchanges. This dynamic points to a fundamental shift, with institutional investors aggressively accumulating the asset.
Exchange Reserves Hit Multi-Year Low
On-chain metrics reveal a substantial tightening of supply. The amount of XRP held on centralized exchanges has plummeted to its lowest level in several years. Over the past 90 days, these reserves have dropped dramatically from approximately 3.95 billion tokens to a current range of 1.6 to 1.8 billion. This represents a decline of nearly 60% since the peak levels observed in October 2025.
This scarcity is compounded by the behavior of large holders. The ten largest wallets now control 38.6% of the total supply. As ETFs and institutional players withdraw liquidity from the open market to back their holdings, each new buy order encounters a shrinking pool of available sellers, creating a classic supply squeeze.
Record ETF Inflows Highlight Institutional Appetite
The primary catalyst for this supply-demand shift is aggressive accumulation through spot exchange-traded funds. U.S. spot XRP ETFs alone recorded a net inflow of $46.10 million at the start of the week, marking the highest single-day figure in over a month.
Should investors sell immediately? Or is it worth buying XRP?
Since their launch in November 2025, these funds have attracted net inflows exceeding $1.23 billion. The consistency of this demand is particularly striking: while Bitcoin and Ethereum products have recently faced outflows, XRP-focused funds have now seen 30 consecutive trading days of positive inflows. Major issuers, including Franklin Templeton and Bitwise, are absorbing a substantial portion of the circulating supply to meet client demand.
Regulatory Tailwinds and Technical Breakout
The asset is also benefiting from a brighter regulatory outlook. Following personnel changes at the U.S. Securities and Exchange Commission (SEC) and the establishment of an all-Republican leadership, market participants are speculating about a potential end to regulation-by-enforcement strategies. Concurrently, Ripple is driving ecosystem expansion, notably through the integration of smart contracts for the decentralized finance (DeFi) sector.
On the charts, this confluence of factors has translated into robust performance. XRP has posted a weekly gain of 21.79%. The price, currently at $2.25, has successfully breached and held above the key $2.20 level, which previously acted as a resistance point.
Market observers now identify the next significant technical hurdle at $2.50. Given the persistent ETF buying pressure and dwindling exchange inventories, this level is expected to be a critical determinant of the trend for the remainder of the week.
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...