XRP Back At The Edge: Will Breaking $2 Barrier Rewrite Its History?

XRP started 2026 with a strong rebound, rallying nearly 18% in the first five days of the year to reach $2.16 according to reports. The broader crypto market also saw gains, led by Bitcoin and Ethereum, as the total market valuation of cryptocurrencies rose by 7.3% year-to-date. Analysts have noted bullish technical setups, including breakout patterns and institutional demand through ETF inflows, suggesting continued upward momentum for XRP.

However, the market faced a setback as WisdomTree, a New York-based asset manager, withdrew its registration for a spot XRP ETF on January 6. The decision caused XRP to drop about 5% in a single day, despite continued inflows into existing ETFs. The move followed similar actions by other firms, such as CoinShares, which also pulled its XRP ETF applications from the US SEC.

Market participants remain focused on technical levels as XRP attempts to reclaim key resistance zones. The price is currently near $2.35, with the 200-day EMA at $2.35 acting as a critical threshold for further upward movement. A breakout above this level could lead to a test of $2.60–$2.70 by February, according to analysts.

Why Did This Happen?

WisdomTree’s decision to withdraw its XRP ETF application was attributed to strategic considerations rather than a loss of interest in the asset. Some industry observers suggested that the move was part of a broader trend where smaller firms step back in anticipation of larger players like BlackRock entering the ETF space.

The withdrawal added to market uncertainty, especially after a period of strong ETF inflows. XRP ETFs had recorded over $1.25 billion in cumulative inflows by early January 2026, with Franklin Templeton’s XRPZ leading the charge. Despite this, the first ETF outflow in nearly two months, amounting to $40.8 million on January 7, signaled a potential shift in investor sentiment.

How Did Markets React?

XRP experienced a sharp pullback after WisdomTree’s announcement. Prices fell from a high of $2.42 on January 5 to as low as $2.08 on January 8, a 14% drop. The ETF outflow followed a record inflow of $46.1 million in a single session just two days earlier, highlighting the volatility in institutional demand.

Despite the drop, XRP’s technical indicators remain largely bullish. The token is attempting to break out of a falling wedge pattern and has shown signs of reaccumulation, with price stabilizing in late 2024 and consolidating below $1.90-2.00 in 2025. Analysts believe the current setup resembles the pre-rally phase seen in 2017, where consolidation was followed by a sharp price increase.

What Are Analysts Watching Next?

Market analysts are closely monitoring key support and resistance levels. XRP’s short-term support is located near $2.05 to $2.10. A failure to hold this level could push prices back toward $1.90. Conversely, a successful breakout above $2.30 could clear the path for a move toward $2.65 and potentially $3.

Longer-term projections are also optimistic, with some analysts citing the Wyckoff reaccumulation model suggesting a potential move toward $7 by mid-2026. This model assumes that large players have absorbed supply during the consolidation phase and are now positioning for a higher move.

Investors are also watching for signs of continued ETF inflows and broader institutional adoption. While XRP ETFs have shown resilience, their performance lags behind Bitcoin and Ethereum, with total assets still far below those of leading cryptocurrencies.

XRP’s market structure has also improved, with transaction activity on the XRPL DEX surging and deeper order books indicating increased usage. Analysts attribute much of the recent strength to structural improvements rather than speculative buying, suggesting the trend could be more sustainable.