XRP Price Recovery Rejected Again, Can It Avoid Falling Below $2?

XRP price remains in a tight trading range near $2.08, with traders awaiting the outcome of the January 15 Clarity Act vote. The token has failed to sustain recovery attempts, remaining under pressure as broader crypto market conditions weaken. Institutional investors, however, continue to accumulate XRP through ETFs, indicating some level of confidence in the token's long-term potential.

The Clarity Act, if passed, could reduce regulatory uncertainty and encourage more institutional participation in the XRP market. This has led to heightened market anticipation and volatility as investors prepare for possible market-moving outcomes. Short-term price action has been mixed, with XRP struggling to break above $2.10 and remaining just above key support at $2.03.

A failure to hold above $2.00 could trigger a wave of long liquidations and intensify bearish sentiment. The next level of support is at $1.90, and a break below that could expose XRP to a decline toward $1.80. This would significantly undermine the current bullish thesis and increase downward pressure from derivatives traders.

What Are Analysts Watching Next?

Regulatory developments remain the top focus for XRP investors, with the Clarity Act vote expected to play a decisive role in near-term price direction. If passed, the act could provide the clarity needed to attract more institutional capital and reduce compliance risks. This is particularly important for XRP ETFs, which have attracted over $1.5 billion in cumulative inflows since their launch in late 2025.

ETF inflows have continued to grow despite the token's three-month decline of roughly 18%. Investors are clearly betting on long-term value, with some even adding to positions during recent drawdowns. For example, the Bitwise XRP ETF recorded $4.51 million in net inflows on a single day in January.

How Are Markets Responding to ETF Demand?

Despite strong ETF inflows, XRP's price has remained range-bound, with traders focusing on key support and resistance levels. The token has failed to break out of a $2.00–$2.18 range, and technical indicators suggest continued caution. This reflects a market that is still waiting for a clear catalyst to drive a directional move.

In South Korea, XRP has been the most traded crypto asset on Upbit, with over $1 trillion in trading volume in 2025. This highlights the token's strong liquidity and user base in a major crypto market. However, this does not necessarily translate to price strength, as on-chain data shows a decline in DEX volume and stablecoin adoption on the XRP Ledger.

What Could Happen if Support Fails?

If XRP falls below $2.00, it could trigger a cascade of forced liquidations and amplify bearish momentum. This would create additional selling pressure and potentially push the token toward $1.90 or even $1.80. Institutional ETF demand may help to cushion the fall, but it would not be enough to reverse the bearish trend in a declining market environment.

On the other hand, a successful defense of $2.00 could provide a bounce and open the path to $2.18 and beyond. If XRP manages to break above $2.18, the next key resistance is at $2.32, and a sustained rally could push the token toward $2.50. This would require strong buying interest and positive regulatory news to maintain momentum.

What Are the Long-Term Implications for XRP?

The long-term outlook for XRP depends largely on regulatory clarity and broader market conditions. If the Clarity Act is passed and institutional adoption continues to grow, XRP could see a gradual upward trend in price. This would be supported by increasing ETF demand, improved liquidity, and growing real-world use cases.

However, the token still faces challenges, including declining DEX volume and concerns about real-world utility. These factors could limit XRP's upside potential in the near term. For now, the market remains in a wait-and-see mode, with traders closely monitoring both regulatory and price developments.

Institutional investors appear to be taking a longer-term approach, buying XRP through ETFs despite the recent price decline. This suggests that some players believe the token has strong fundamentals and a role to play in global payment infrastructure. However, retail traders remain cautious, and the overall market sentiment remains fragile.