XRP ETFs Experience First Outflows as Whale Activity Surges and Market Sentiment Weakens

U.S. spot XRP exchange-traded funds (ETFs) recorded their first net outflows since their launch on January 7, 2026. The outflows marked the end of a 54-day streak of uninterrupted inflows. The total outflow for the day was $40.8 million, with the 21Shares TOXR ETF leading the decline with $47.25 million in redemptions.

Despite the outflows, XRP ETFs remain among the strongest-performing crypto ETFs. The cumulative net inflow since their launch remains at $1.2 billion, with total net assets above $1.5 billion. This suggests strong investor demand despite short-term fluctuations.

The XRP price dropped by approximately 7% during the outflow period. According to TradingView data, the price fell from a daily high of $2.319 to $2.149, and further dropped to $2.103 by Thursday. The decline coincided with broader weakness in the crypto ETF market, with Bitcoin and Ethereum ETFs also experiencing significant outflows.

The outflows were not evenly distributed among all XRP ETFs. Canary Capital’s XEPC saw an inflow of $2.32 million, Bitwise’s XRP attracted $2.44 million, and Grayscale’s GXRP saw $1.69 million in inflows. Franklin’s XRPZ remained flat. This highlights the dynamic nature of the XRP ETF ecosystem.

Why Did This Happen?

The outflows from XRP ETFs occurred amid heightened whale activity on the XRP Ledger (XRPL). On-chain data from Santiment showed that whale transactions surged to 2,802 large-value transfers on January 6, a three-month high. Typically, such spikes in whale activity signal rising market conviction and potential volatility.

Whale transactions on the XRPL include movements between wallets, exchange inflows and outflows, and custodial rebalancing. These transactions do not necessarily indicate buying or selling but rather repositioning of capital. However, when these transactions spike, it often suggests that market participants are actively managing their positions.

The timing of the outflows coincided with broader market sentiment turning bearish. XRP failed to maintain local highs and faced rejection near $2.40. The bears pushed the price below $2.13, signaling a potential shift in market direction.

How Did Markets React?

The XRP price fell from highs of $2.42 on January 5 to as low as $2.08 on January 8, reflecting a 14% drop. The price action suggests hesitation among investors and a lack of strong institutional appetite. The decline in XRP price was accompanied by a drop in total traded value for XRP ETFs to $33.74 million, the lowest since mid-December.

Market sentiment for XRP also reached an extreme level. The Crypto Fear & Greed Index dropped to 24, indicating extreme fear. Social sentiment analysis showed bearish commentary was significantly higher than in November, further reinforcing the bearish mood.

Despite the price drop, analysts remain generally bullish on XRP. Some predict the cryptocurrency could reach $5 or even $20 if bullish momentum continues. The current pullback is seen as temporary rather than a long-term shift in institutional interest.

What Are Analysts Watching Next?

Analysts are closely monitoring XRP’s ability to defend the $2.30 support level. If the price holds, it could indicate a potential move toward the $2.50–$2.75 range. Conversely, a break below $2.00 could trigger further downward pressure.

Whale activity is also a key focus. Historically, such spikes have preceded significant price moves. Analysts are watching whether the current whale activity aligns with accumulation or distribution patterns.

The broader crypto ETF market is also under observation. Bitcoin and Ethereum ETFs have also seen outflows, signaling a potential shift in investor behavior. Smaller crypto ETFs, such as those for Solana and Chainlink, have shown more resilience.

Institutional demand remains a critical factor. Despite the recent outflows, XRP ETFs have still attracted $1.2 billion in cumulative inflows since launch. This suggests that long-term demand remains strong even amid short-term volatility.