XRP's January Catalyst: A $1.85 Support Test Before the $8 Forecast

The immediate catalyst for XRP is a calendar-driven event: a scheduled 1 billion XRP escrow unlock on January 1, 2026. This is the first such release of the new year, and it's creating a clear technical setup. The token is currently trading around $1.87, but price action shows a market preparing for a move. Volume has spiked, yet the price is failing to break resistance, indicating positioning rather than panic. This compression around the $1.85 level is the tactical test.

The critical technical support to watch is the $1.85 handle. A decisive break below this line would likely trigger a rotation into deeper support near $1.77, with more significant levels in focus around $1.60–$1.55. Conversely, if $1.85 holds and XRP can reclaim the $1.88–$1.89 zone, the path to recovery opens toward $2.00 and the downtrend line near $2.08. The current range-bound action with high volume suggests the market is in a defensive stance ahead of the unlock.

Historical precedent offers some context for the sell-side pressure. Ripple has a pattern of re-escrowing the bulk of unlocked tokens, typically returning 60% to 80% to long-term storage. For instance, in December, roughly 70% of the released XRP was promptly re-locked. This practice limits the immediate supply shock, but it does not eliminate the event's price impact. The unlock heightens sensitivity to supply and liquidity, and the market is already pricing in this dynamic. Traders should monitor on-chain activity for large transfers that could signal incoming selling pressure, even if past unlocks have shown little lasting effect.

The bottom line is that the January 1 unlock creates a binary technical test. The $1.85 level is the line in the sand. A break below could accelerate a move toward deeper support, while a hold could set the stage for a recovery attempt. The event itself is a known catalyst, and the market is positioning accordingly.

Reason 2: Sustained Institutional Demand Provides a Fundamental Floor

While the price of XRP has remained range-bound, a powerful and steady force is building beneath it: consistent institutional accumulation. The launch of U.S. spot XRP ETFs has created a reliable source of demand that acts as a fundamental floor. These funds have attracted over $1.15 billion in net inflows since their November launch, with a notable 29-day streak of positive flows. This pattern of steady, longer-horizon capital injection is a key differentiator from the more volatile flow patterns seen in Bitcoin and Ethereum ETFs. As one analyst noted, this accumulation reflects a "function of regulatory clarity and steady accumulation into a less crowded trade", with XRP's cross-border settlement use case offering unique appeal.

This institutional demand provides a critical buffer against supply shocks. The inflows are steadily pulling XRP out of exchange wallets, with exchange balances falling toward multi-year lows. This reduction in liquid supply available on trading venues can magnify price moves if demand holds steady, as there are fewer sellers willing to provide liquidity at key levels. The setup is one of positioning rather than panic, with rising volume and a stable price around the $1.85 support zone indicating the market is preparing for a potential breakout.

The catalyst for a sustained move higher is the continued expansion of this ETF landscape and the removal of a major legal overhang. A new filing by Roundhill to launch an XRP Covered Call Strategy ETF confirms that XRP is now accepted as a base asset for regulated financial products. This adds credibility and opens the door for more sophisticated, income-generating products, broadening the pool of potential institutional investors. More importantly, the resolution of the long-running SEC case has removed a persistent drag. When the regulator formally withdrew its appeal in August, it cleared the path for asset managers to launch spot ETFs, directly fueling the current inflow wave.

Standard Chartered's bullish $8 forecast for 2026 is anchored in this new reality. The bank argues that improved regulatory clarity has given the XRP ecosystem room to build without constant litigation risk, while institutional interest has shown up through market structure. The bottom line is that the steady ETF inflows are creating a more resilient foundation for the token. Even if the price remains range-bound in the near term, this sustained demand provides a clear floor and a powerful catalyst for a breakout if broader market sentiment shifts.

Reason 3: The Path to $8 Requires a Break Above Key Resistance

For the bullish forecast to materialize, XRP must first clear a significant technical and fundamental hurdle. The token is currently trapped in a narrow range around $1.85, with price action showing a clear support-defense market with supply overhead. The immediate ceiling is a well-defined resistance zone between $1.92 and $1.93, where sellers have repeatedly stepped in. A sustained break above that level is the minimum requirement to shift the short-term tone from defensive to recovery mode, opening a path toward the next major target near $2.00 and the downtrend line at $2.08.

This technical breakout faces a potential supply-demand imbalance. While U.S.-listed spot XRP ETFs have pulled in roughly $1.25 billion in net inflows since launch, suggesting steady institutional interest, exchange balances have fallen to multi-year lows. This reduced liquid supply can magnify price moves if demand holds, but it also means the market is highly sensitive to any new selling pressure. The upcoming January 1 escrow unlock of 1 billion XRP is the primary near-term catalyst that could test this dynamic. Although Ripple typically re-escrows the bulk of unlocked tokens, the event heightens sensitivity to on-chain activity. A large transfer of unlocked XRP into circulation could signal incoming supply and pressure the price, making a clean breakout more difficult.

The bottom line is that the path to $8 is a multi-stage climb. The first, and most immediate, step is a decisive break above the $1.92-1.93 resistance. Failure to do so would likely see the market rotate into the next demand pocket around $1.77, with deeper support near $1.60-$1.55. The market's failure to rally despite consistent ETF inflows highlights that fundamental support is not yet translating into price momentum. For the optimistic scenario to gain traction, XRP must first prove it can overcome this technical shelf and demonstrate that demand can absorb any supply from the January unlock.