XRP Holds Critical Support as Whales Step Back - Is This the Calm Before a Violent Breakout?

XRP began 2026 under pressure, with the token failing to hold above the $2 mark. The price has been consolidating in a range of $1.63 to $1.92 since late 2024. Whale activity has increased recently, with large holders adding $3.6 billion in XRP in a single day.

The XRP Ledger has seen a sharp decline in daily active addresses, dropping from 600,000 in March 2025 to 38,500 in December 2025. This suggests a lack of immediate utility demand despite growing institutional interest and ETF inflows.

ETF inflows have been strong, with $1.4 billion in net inflows recorded since the launch of spot XRP ETFs in November 2025. However, the price has not responded proportionally, remaining below $3.66 highs reached in 2025.

Why Did This Happen?

The SEC settlement with Ripple in August 2025 was expected to unlock a major bullish trend, but the market has not reacted as anticipated. XRP briefly surged to $3.66 after the case dismissal but fell back to $1.58 by October 2025.

The token's technical indicators remain mixed. The RSI is near 48, indicating neutrality, while the MACD shows weak momentum. Some analysts warn of a potential double top pattern, which could signal a bearish reversal.

How Did Markets React?

ETF demand has continued to be a key driver of XRP's price action in 2026. However, the first ETF outflow occurred on January 7, with $40.8 million leaving the five approved XRP ETFs. This marked the end of a 54-day inflow streak and contributed to XRP's 14% decline from $2.42 to $2.08 in a short period.

WisdomTree, a top ETF issuer, withdrew its XRP ETF application on January 6. This decision caused a further 6% drop in XRP's price, as investors reevaluated market dynamics. The firm cited market saturation and timing as potential reasons for its decision.

What Are Analysts Watching Next?

Analysts remain divided on the short-term outlook for XRP. A sustained move above $2.00 could test the $2.20 resistance level, potentially setting up for a larger breakout.

On the other hand, a breakdown below $1.80 would likely trigger a cascade of selling. Some analysts believe this could bring the price down to $1.60 or even lower.

Longer-term, Standard Chartered has maintained its $8 price target for XRP, citing improved regulatory clarity and institutional adoption through ETFs. However, this target assumes continued ETF inflows and regulatory support, which are not guaranteed.

Whale accumulation remains a bullish sign, with large holders continuing to add to their positions. This indicates confidence in XRP's long-term utility and growth potential.

The market is closely watching for key catalysts, including progress on the CLARITY Act and continued ETF inflows. These factors could determine whether XRP breaks out of its consolidation phase or enters a deeper correction.

Investors are also monitoring the performance of Ripple's payment infrastructure, including the RLUSD stablecoin and On-Demand Liquidity (ODL) service. These developments could provide further validation of XRP's utility and drive price appreciation.

The next few weeks will be critical for XRP as it tests key support and resistance levels. A strong move above $2.20 could signal the start of a new uptrend, while a breakdown below $1.80 would likely lead to a reevaluation of the market's bullish case.