XRP has opened 2026 with significant strength, posting notable gains. This upward movement is being driven by a confluence of factors: substantial and consistent inflows into U.S. spot ETFs, a tightening supply on centralized exchanges, and a more favorable regulatory backdrop. The key question for investors is whether this represents a sustainable trend or a transient surge.
Regulatory Tailwinds Improve Sentiment
A shift in the U.S. regulatory landscape is providing support. The departure of SEC Commissioner Caroline Crenshaw, coupled with ongoing discussions about market structure reform expected to advance in January, has bolstered market participant optimism.
For years, XRP was weighed down by the SEC’s lawsuit against Ripple and the associated legal uncertainty. Consequently, the approval and successful launch of spot ETFs in late 2025 marked a pivotal moment. The asset has since been viewed as a clear beneficiary of the evolving stance toward digital assets, regaining some of its institutional credibility.
Exchange Supply Hits Multi-Year Lows
Simultaneously, the supply available for trading is contracting sharply. On-chain data reveals that XRP reserves held on centralized exchanges have plummeted to multi-year lows. Compared to October 2025, the amount held on these platforms has dropped by 57%.
This creates a classic supply squeeze: with fewer coins readily available for sale, even moderate buying pressure can trigger outsized price moves. Many traders interpret the persistent outflows from exchanges as a sign of long-term investor accumulation rather than short-term speculation.
From a technical perspective, XRP is working to confirm its recent breakout. The price band between $2.28 and $2.32, which previously acted as resistance, is now being tested as a potential support zone. Recent trading volume has been among the highest since mid-December, underscoring the significance of the current price level.
Technical indicators also show a recovery. Previously deeply oversold with a 14-day RSI of 28.8, XRP has rebounded. The current price of $2.33 sits approximately 15% above the 50-day moving average of $2.02 and is about 24% higher than its level at the start of the year.
Unbroken ETF Inflows Provide Core Support
The primary engine for the rally is the performance of U.S. spot ETFs. Since their launch on November 13, 2025, these products have attracted cumulative inflows exceeding $1 billion and now manage roughly $1.65 billion in assets.
Should investors sell immediately? Or is it worth buying XRP?
Notably, there has not been a single day of net outflows since inception. Recent leaders include the Franklin “XRPZ” ETF, which saw daily inflows of $21.76 million, and the Bitwise product with $17.27 million. Market observers view this consistency as a signal that institutional investors are increasingly gaining exposure to XRP through regulated channels.
Supporting this view, data from CoinShares indicates that XRP inflows into fund products surged by 500% in 2025 compared to the previous year—from approximately $600 million to $3.7 billion. This firmly positions XRP as a winner in the institutional adoption narrative.
Market Context and Competing Analyst Views
XRP’s advance is occurring within a broadly positive crypto environment. The total market capitalization of digital assets rose 8.2% in the first days of 2026. Bitcoin reached a six-week high near $95,000, while Ethereum traded around $3,222. In this “risk-on” setting, capital is rotating from Bitcoin into major altcoins, with XRP being a prime beneficiary.
With a 7-day performance of over 26% and a year-to-date gain of about 24%, XRP is currently outperforming many peers. It still trades roughly 23% below its 52-week high of $3.04 and approximately 29% above its low of $1.81, indicating room for movement in either direction.
Analyst opinions, however, remain mixed. Bullish arguments focus on technical signals:
* The XRP/BTC pairing is approaching a breakout above its monthly Ichimoku cloud—a move not seen since 2018.
* Some analysts project potential price targets between $4.50 and $7.00 based on this setup.
* The Accumulation/Distribution indicator continues to show sustained buying pressure.
Conversely, cautionary notes persist. John Bollinger, creator of Bollinger Bands, has characterized XRP’s price pattern as “weaker” relative to Bitcoin and Ethereum. Chart technician Peter Brandt identifies the broad zone between $1.50 and $3.50 as a critical decision area for determining the next major trend. Furthermore, XRP’s price action remains heavily tied to broader crypto market sentiment, showing limited independent momentum thus far.
Conclusion: Demand Meets Constricted Supply
XRP is entering 2026 with considerable momentum. The combination of robust, unbroken ETF inflows, declining exchange reserves, and a more constructive regulatory climate paints an optimistic picture. Technically, the $2.28 to $2.32 zone serves as a crucial support area. As long as the price holds above this level, the current supply-demand dynamics suggest continued strength—particularly if the supportive overall crypto market environment endures.
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