XRP has staged an impressive recovery at the start of the year, marking a significant turnaround. The digital asset has posted a 28% gain since January began, reclaimed its position as the third-largest cryptocurrency by market capitalization, and earned the designation of “Breakout Trade of 2026” from CNBC. This resurgence is not merely speculative; it is underpinned by concrete on-chain metrics and investment flows, from exchange liquidity to sustained ETF interest.
ETF Inflows Defy Broader Market Trends
A primary catalyst for the rally appears to be U.S.-listed exchange-traded funds (ETFs) holding XRP. On January 5, these funds attracted $46.1 million in new capital. This inflow is particularly notable given the general weakness observed across the broader cryptocurrency market throughout the fourth quarter of 2025. CNBC analysts highlighted that investors continued allocating funds to XRP products even during price corrections.
This persistent demand sets XRP apart from many other alternative cryptocurrencies and suggests a foundation of institutional confidence. Market observers point to the resolution of the SEC’s lawsuit against Ripple as a key factor in removing a major overhang. CNBC cited this legal clarity, alongside XRP’s less crowded positioning compared to Bitcoin and Ethereum, as reasons for its recent outperformance.
Liquidity Metrics Paint a Bullish Picture
An unusual dynamic emerged during recent price movements. While XRP’s price corrected, the total liquidity on the XRP Ledger’s decentralized exchange (DEX) climbed to $173 billion. Typically, this metric declines alongside falling prices. Furthermore, DEX transaction volume reached 890,268, indicating this liquidity is being actively traded, not just parked.
The Taker-Buy Ratio, which rose above 0.5, offers another critical signal. This shift shows that buy orders are currently dominating market activity. Analysts note that since mid-December 2025, there have been accumulating waves of larger liquidity injections, potentially hinting at institutional positioning. Adding to upward pressure was the liquidation of $5.8 million in short positions, which forced buy-side covering.
Should investors sell immediately? Or is it worth buying XRP?
Technical Structure: Support, Resistance, and Patterns
The asset experienced volatility on January 7, declining from $2.39 to $2.27 after breaching a key support level at $2.32. Trading volume spiked 142% above average to $256.3 million—a classic signature of a short-term sell-off. Sufficient buying interest was found around $2.21 to stabilize the price.
The $2.31 to $2.32 zone now acts as immediate resistance, with the 200-day moving average presenting a further hurdle between $2.40 and $2.50. From a chart perspective, the price action resembles a market consolidation more than a sustained downtrend. The formation of several higher lows around $2.26 points to underlying accumulation.
Outlook: Channel or Breakout?
Chart analyst “The Great Mattsby” has identified a rare technical setup: the XRP/BTC pairing is approaching a potential breakout above its monthly Ichimoku Cloud for the first time since 2018. A confirmed breakout from this pattern could signal a period of XRP outperforming Bitcoin in the coming weeks.
The immediate future likely hinges on reclaiming the $2.31-$2.32 resistance area. A successful break above this level would support the continuation of the current bullish structure. Failure to overcome this barrier could see the price revert to its descending channel in the near term. However, the weight of on-chain data and steady ETF inflows suggests larger market participants are positioning for further gains.
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