XRP Pulls Back After Early-2026 Rally as Technicals Turn Bearish

• XRP drops to $1.96 after $2 support breaks, hit by volatility and leveraged liquidations.
• U.S. spot XRP ETFs see $1.28B inflows since Nov 2025, fueling Q1 price potential.
• Recovery depends on key support at $1.98 and resistance near $2.05.

XRP fell sharply today, dropping from $2.06 to an intraday low of $1.96 after breaching the $2 support level. The rapid decline was driven by Bitcoin volatility and forced liquidations of leveraged positions that cleared out high-risk trades. While XRP’s price has stabilized around $1.98, it has failed to reclaim crucial resistance.

Technical Structure Remains Weak

Notably, XRP began 2026 with over 20% gains, outperforming Bitcoin and Ethereum. However, the rally has quickly reversed, with the token trading 2% lower over the past week, reducing the monthly gain to 3.4%.

The near-term outlook remains weak. XRP is trading below major moving averages, with resistance around $2.05–$2.08. Momentum indicators also favor sellers.

On-chain and derivatives data back this view, showing declining open interest and losses concentrated among long positions.

XRP Ownership and Market Concentration

On-chain data shows XRP ownership is still concentrated among large holders. The top 10 wallets control about 18.6% of the supply, while wallets ranked 10–50 hold another 24.9%. Smaller wallets make up the remaining 56.6%.

Ripple Labs is the single largest holder, with about 45% of XRP locked in escrow and nearly 1% held for operations. Ripple co-founder Chris Larsen controls an estimated 2.5–2.7 billion XRP. Former co-founder Jed McCaleb sold his 9 billion XRP stake after leaving Ripple, earning roughly $3.2 billion.

Major exchanges such as Binance and Bithumb also hold significant XRP balances, highlighting how whale activity can strongly influence price movements.

Institutional Developments and ETF Inflows

Institutional activity could shape XRP’s price action in Q1. U.S. spot XRP ETFs have drawn more than $1.28 billion in net inflows since launching in November 2025, including $56 million added last week. Total assets across these ETFs now exceed $1.52 billion.

Funds from institutions such as Bitwise and Grayscale (GXRP) hold over 700 million XRP combined. This removes supply from the open market, potentially increasing upward price pressure.

RLUSD Stablecoin and Ripple’s Growth

On the regulatory front, Ripple has received preliminary approval for an Electronic Money Institution (EMI) license in Luxembourg, strengthening its standing in Europe. 

In the U.S., the proposed Clarity Act, awaiting Senate review, could cement XRP’s legal status and allow banks and institutions to hold XRP on their balance sheets.

Ripple is continuing to grow its ecosystem. Its dollar-backed stablecoin, RLUSD, is being tested in cross-border payment pilots with banks in Japan and South Korea. 

Transactions on the XRP Ledger burn small amounts of XRP as fees, and stablecoins used via ODL can increase XRP demand for liquidity.

Despite Ripple’s corporate expansion and hundreds of partnerships, XRP’s original role as a global bridge currency has weakened. Banks increasingly rely on messaging tools and stablecoins like USDC, reducing the necessity of XRP as a volatile settlement asset.

Q1 Outlook and Key Levels

XRP’s short-term rebound depends on holding above $1.98 and reclaiming $2.00. A move above $2.05–$2.10 would suggest the recent sell-off was temporary and could open the door to $2.20–$2.30. On the downside, a drop below $1.91 may lead to further losses, with $1.85 as the next key support.

Recent speculative buzz has also been fueled by a viral Grok AI post showing a hypothetical $10 XRP in 2026. While intended as a lighthearted scenario, it reflects renewed optimism among parts of the XRP community, where some analysts see potential for $5–$10 targets over the longer term.

At the same time, bearish risks remain. Analyst EGRAG CRYPTO has outlined a downside “maximum fear” scenario, with XRP potentially falling to $1.20–$1.40. Meanwhile, he considers these levels as a possible long-term buying opportunity.

Related: Ripple, UC Berkeley Launch Blockchain Accelerator Focused on XRP Ledger Projects