XRP Consolidates Above $2 As Volume Z-Score Signals A Quiet Market

XRP has consolidated above $2 as of January 12, 2026, following a volatile week marked by significant price swings and intense derivative trading activity. The token reached a high of $2.39 before retreating to $2.12, with Binance leading the liquidation activity during this period. Despite the sharp price movements, XRP's on-chain metrics, including its MVRV Z-Score, indicate deteriorating holder conviction and structural weakness.

The MVRV Z-Score for XRP has continued to decline, reflecting a weakening on-chain structure and waning confidence among long-term holders. This pattern contrasts with Ethereum's recent brief foray into negative Z-Score territory, which acted as a support level for the asset. The divergence in on-chain behavior highlights varying investor dynamics across major cryptocurrencies.

Binance was the primary venue for XRP liquidations in early January, with both long and short positions facing forced unwinds. On January 5 alone, short liquidations reached $24.4 million, while long liquidations spiked to $22.9 million the next day. These two-sided liquidation events indicate a leverage reset rather than a clear directional move, as traders repeatedly rebuilt bullish exposure only to be forced out again as the price failed to stabilize.

Why Did This Happen?

XRP's recent price action has been driven by derivative trading rather than spot demand, with leverage-heavy positions dominating short-term price movements. Binance's dominance in liquidation volume underscores how derivatives are shaping the token's price trajectory. The repeated liquidation waves suggest fragile conviction and a lack of durable support levels, as both bulls and bears were caught in the same cycle of overleveraging.

The MVRV Z-Score, a key on-chain metric, has been declining steadily for XRP, signaling structural weakness. This trend reflects deteriorating on-chain conditions and less conviction among holders, which could lead to further price consolidation or weakness. In contrast, Ethereum showed resilience by bouncing off a negative Z-Score, indicating stronger holder commitment to current valuations.

What Are Analysts Watching Next?

Analysts are closely monitoring XRP's on-chain metrics and price behavior to gauge its long-term viability. The token's recent surge in spot ETF inflows has drawn institutional attention, with XRP ETFs attracting over $1 billion in net inflows since November 2025. However, some analysts remain cautious, noting that XRP's ecosystem lacks sufficient developer activity to drive sustainable growth.

Despite the bearish on-chain signals, XRP has emerged as a breakout trade in the 2026 crypto rally, surpassing Binance's BNB by market value. The token's core use case in cross-border payments positions it as a unique alternative to Bitcoin and stablecoins. Ripple's regulatory resolution and recent funding rounds have also contributed to growing institutional interest.

Market participants are also watching the price action around $2.30, a key support level that has been tested multiple times in recent weeks. If this level breaks, XRP could face further downward pressure, potentially slipping below $2 again. Conversely, a rebound above $2.40 could signal renewed bullish momentum, particularly if ETF inflows continue to outperform Bitcoin and Ethereum.