Ripple Price Forecast: XRP Risks Sliding Below $2.00 as Steady ETF Inflows Fail to Lift Sentiment

Ripple (XRP) continues to trade downward toward $2.00, pressured by declining retail interest. Despite steady inflows into related ETFs, the coin faces increasing downside risks.

The derivatives market for XRP has shown signs of weakening. Open Interest (OI) in futures contracts, which peaked at $4.55 billion earlier in the week, has since declined to an average of $4 billion. This trend suggests waning confidence in XRP's ability to maintain an upward trajectory.

Retail traders appear to be losing interest. Meanwhile, long positions in XRP futures are growing. The OI-Weighted Funding Rate has increased to 0.0051%, up from -0.0018% earlier in the day.

Why the Move Happened

XRP ETFs have seen consistent inflows since their launch in November. Last week, XRP ETFs recorded $38 million in inflows, with Friday alone bringing in nearly $5 million. Despite these inflows, XRP has fallen almost 20% since mid-November.

The cumulative inflow into XRP ETFs now stands at $1.22 billion, with net assets at $1.47 billion. Yet, these numbers have not translated into a sustained price recovery.

Investor sentiment remains fragile. The decline in OI and the rise in long positions suggest that traders are adjusting their positions to manage risk.

How Markets Responded

Technical indicators suggest further downward pressure. XRP is currently trading at $2.04, still below the 50-day, 100-day, and 200-day EMAs.

The RSI is at 51 and falling, signaling a shift from bullish to bearish momentum. A break below the $2.00 level could accelerate the downtrend toward a January 1 low of $1.81.

The MACD blue line is expected to cross below the red signal line, confirming a sell signal. A positive histogram contraction also indicates that a recovery may be delayed.

What Analysts Are Watching

Resistance levels are forming at $2.33. A breakout above the 50-day EMA at $2.07 would target the 100-day EMA at $2.21. A move beyond the 200-day EMA at $2.32 and the trend resistance could shift the bias to the upside.

Analysts are also watching the broader regulatory landscape. Ripple recently secured FCA authorization in the UK, expanding its regulatory footprint and potentially increasing exposure for investors in the region.

However, the recent $40.8 million outflow from XRP ETFs on January 7 marked the first reversal in a 54-day inflow streak. This outflow triggered a significant drop in total ETF assets and a sharp decline in XRP's price.

The recent withdrawal of WisdomTree's XRP ETF application with the SEC is also being closely watched. While it has not dampened overall demand, the market is evaluating whether this reflects broader hesitancy or a temporary setback.

Investors remain cautious as XRP ETFs continue to attract strong inflows. The overall market environment suggests that while ETF inflows are strong, they may not be sufficient to drive a sustained price recovery in the near term.