The digital asset XRP has opened 2026 with significant momentum, staging a notable recovery to secure the third-largest market capitalization in the cryptocurrency sector. After experiencing a pullback in the final weeks of 2025, the token surged during the first full trading week of the new year, decisively moving above the psychologically significant $2.00 level. Current trading places its value at approximately $2.13.
This rally has propelled XRP’s total market valuation to around $122 billion, allowing it to overtake Binance Coin (BNB) for the number three spot. Market observers are now analyzing the key drivers behind this resurgence.
Scarcity and Institutional Demand Fuel the Advance
Analysts point to a confluence of three primary factors supporting the price appreciation. A substantial reduction in available supply is the first major element. Holdings of XRP on centralized cryptocurrency exchanges have plummeted to their lowest point in eight years. This scarcity on trading platforms reduces potential selling pressure, creating a more favorable environment for price increases when demand rises.
Secondly, significant accumulation by large-scale investors, often referred to as “whales,” is evident. Blockchain data indicates that addresses holding substantial balances have purchased roughly 330 million XRP over recent weeks, an investment exceeding $700 million. The combined holdings of these major addresses have grown by 8% since late 2025.
The third and perhaps most transformative factor is the influx of institutional capital following the launch of spot XRP Exchange-Traded Funds (ETFs) in November 2025. These regulated investment vehicles have rapidly accumulated assets under management, now estimated between $1.2 billion and $1.37 billion. They continue to be net buyers, with a single day’s inflow on January 5th reaching $13.6 million. In under two months, these ETFs have absorbed approximately one percent of XRP’s total circulating supply.
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Technical Perspective: Resistance Looms
From a chart analysis standpoint, XRP is trading above its key moving averages, indicating bullish near-term momentum. The immediate technical challenge lies in a resistance band between $2.17 and $2.25. A sustained breakout above $2.30 could potentially open a path toward the $3.00 level. On the downside, initial support is found near $2.07, with a break below $1.97 viewed as a more critical bearish signal.
The Relative Strength Index (RSI) currently reads 72, approaching territory traditionally considered overbought. This suggests the possibility of near-term consolidation or profit-taking before any further upward movement can be sustained.
Network Fundamentals and Future Trajectory
Beyond speculative trading, the underlying XRP Ledger continues to demonstrate robust utility, consistently processing about one million transactions daily. Ripple, the associated technology company, reports operational presence in 55 countries and continues to drive integration of its solutions for cross-border payments.
The protocol’s development roadmap for 2026 includes planned upgrades intended to introduce native lending protocols and enhanced data protection features.
Overall market sentiment remains positive. Whether XRP can successfully breach the $2.25 resistance and extend its uptrend will likely depend on the persistence of institutional inflows and the continued drawdown of exchange reserves. While technical conditions appear supportive, the elevated RSI level advises caution regarding potential short-term pullbacks.
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