XRP Price Predictions Split as Traders Debate a Fresh Rally Vs Reallocating to This Higher-Return Assets Class

XRP's price action in early 2026 has created a split among traders and analysts, with some seeing a potential breakout and others anticipating continued consolidation. Price levels and technical indicators suggest a key test near $2.70. ETF inflows remain a major factor, but recent data shows some profit-taking among institutional investors.

Exchange supply trends provide further clarity. Binance's XRP reserves have fallen to around 2.6 billion tokens, the lowest since early 2024. This drop is typically seen as a bullish signal, indicating reduced immediate sell pressure and improved market structure.

Institutional demand remains a key driver. Spot XRP ETFs have seen 54 consecutive days of inflows, showing sustained interest from large investors. However, a recent $40.8 million net outflow on January 7 suggests some participants are locking in gains.

Why Did This Happen?

The tightening supply and steady ETF flows have positioned XRP for potential upside, but recent price action shows signs of caution. On-chain metrics suggest a healthier market structure compared to previous corrective phases.

Price consolidation has been evident in recent weeks. XRP remains below its descending trendline and key EMAs, which are stacked between $2.07 and $2.34. This structure keeps the broader trend corrective rather than bullish.

The market is also reacting to regulatory developments. Ripple's resolution of its SEC case has removed a major overhang, allowing institutional investors to consider XRP as a less-crowded alternative to Bitcoin and Ethereum.

How Did Markets React?

Alternative payment tokens are attracting attention as XRP consolidates. Remittix, for example, has launched a live wallet and is preparing for a February 2026 PayFi platform launch. The project has raised $28.6 million in private funding and is positioned as a direct competitor to XRP in cross-border payments.

Digitap ($TAP) is another emerging player. The project combines traditional banking and blockchain into a single interface, making it an appealing option for remittances. Digitap's fees are under 1% and it offers a user-friendly experience that could attract retail users.

What Are Analysts Watching Next?

Analysts are closely watching the $2.40 level as a potential turning point. A sustained move above that level could validate a shift in momentum. The 200-day EMA remains a critical resistance point at $2.34.

Short-term volatility is expected as the market decides direction. The RSI on two-hour charts is near 40, showing weak momentum. Price remains below the upper Bollinger Band, suggesting limited upside pressure.

The broader market is shifting toward execution-driven projects. Unlike XRP, which relies on historical momentum, newer projects like Remittix and Digitap are focused on delivering real-world utility through live products and clear timelines.

Institutional investors are also evaluating risk factors. Some are rotating out of XRP into tokens with clearer use cases and execution roadmaps. This trend could continue as the market matures.

The outcome of XRP's current consolidation phase will depend on several factors, including ETF inflow sustainability, regulatory clarity, and macroeconomic conditions. A confirmed breakout above $2.40 could open the door to higher price ranges, but a failure to hold $2.00 would likely extend the corrective trend.