While XRP’s price action has tested investor patience through a prolonged sideways trend, a deeper look reveals a contrasting narrative unfolding beneath the surface. Key blockchain metrics and institutional flow data suggest sophisticated market participants may be building positions during this period of apparent weakness.
Institutional Confidence Defies Retail Sentiment
Despite two consecutive months of declines, institutional interest remains robust. The XRP spot ETFs launched in November 2025 continue to attract capital, with a single recent trading session seeing inflows exceeding $11 million. This sustained demand highlights a significant divergence: while broader sentiment among smaller investors has soured, larger, regulated investment vehicles are experiencing consistent buying.
Analysts point to the legal clarity achieved through Ripple’s $50 million settlement with the SEC as a foundational factor underpinning this institutional confidence. The regulatory certainty appears to have created a durable trust that is translating into tangible ETF investments, irrespective of short-term price volatility.
Exchange Reserves Dwindle as Network Activity Heats Up
A critical on-chain development supporting a potential supply squeeze is the behavior of exchange reserves. Data from analytics firms like CryptoQuant indicates that XRP holdings on major trading platforms, including Binance, have been declining. Market observers traditionally interpret this movement—where investors transfer assets from exchanges to private wallets—as a bullish signal. It reduces the immediately available supply for sale, historically a precursor to price recoveries as selling pressure abates.
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Simultaneously, the network’s underlying economic activity tells a vibrant story. XRP’s Network Velocity, a metric tracking how frequently coins change hands, reached its highest point of 2025 in early December. This indicates active utilization of the blockchain, suggesting fundamental health that the current stagnant price fails to reflect.
Price Context and the Path Forward
Currently trading around $1.86, XRP has consolidated within a narrow range between $1.87 and $1.91 over the holiday period. The token has faced a challenging quarter, posting a decline of approximately 16% over the past month, following a nearly 14% drop in November.
Looking ahead to 2026, the fundamental landscape for XRP has improved considerably. The year 2025 concluded with a resolved regulatory overhang and an established ETF infrastructure. Upcoming developments, including the recent technical introduction of the “earnXRP” Vault in December and the anticipated progress of U.S. crypto legislation like the CLARITY Act in the first half of 2026, provide a firmer foundation. These elements set the stage for a potential revaluation, contingent on a stable broader macroeconomic environment.
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