3 Reasons XRP Rallies Stall — What Must Change For A Sustained Recovery

After failing to push past the critical short‑term resistance at $1.60 last week, XRP has slid about 8%, settling back into the $1.35–$1.40 trading range. Market analyst Sam Daodu says three connected problems explain why recent rallies have fizzled and what must change for a sustainable recovery.

XRP Faces Resistance Until Bitcoin Clears $75,000

First, Bitcoin (BTC) dominance remains high. Daodu notes Bitcoin’s share of the crypto market has hovered around 58.6% for much of 2026 and stayed above 58% most of the time. Historically, broad altcoin rallies tend to begin when Bitcoin dominance falls below 50% and capital rotates from BTC into smaller tokens. 

That rotation has not occurred: institutions are not reallocating to altcoins but either leaving crypto or keeping funds in Bitcoin as a perceived safe haven. Daodu argues that unless Bitcoin decisively breaks and holds above $75,000, even XRP’s strong fundamentals are unlikely to move its price materially.

Second, large holders have been steadily taking profits since XRP hit $3.65 in July 2025. Daodu estimates roughly $6 billion in XRP has been sold by whales since that peak, and substantial volumes continue to flow onto exchanges.

The expert identified that many of these whales originally bought below $0.65, so they are willing to sell into rallies to lock in gains, asserting that selling pressure keeps rallies short‑ lived.

Third, a large portion of holders sits underwater, which creates persistent resistance near the current price. Glassnode data cited by Daodu shows 60% of circulating XRP is held at a cost basis above today’s levels; the average cost basis across holders is approximately $1.44. 

Because that average is nearly the center of XRP’s recent trading band, holders who have been losing money sell when price approaches breakeven, using $1.45 as a take‑profit level. 

ETFs Fail To Absorb Supply

Daodu adds that even if XRP clears $1.45, further layers of selling are likely: positions across the $1.40–$3.65 range contain clusters of holders looking to return to breakeven or better, meaning upward moves tend to meet fresh supply.

Exchange‑traded funds (ETFs) focused on XRP add another structural constraint. Total assets under management (AuM) fell from ITS January peak of $1.65 billion to about $1 billion as the token’s price declined. 

At the current inflow pace—roughly $1.9 million per week—ETFs would only add about $100 million by year‑end, a level Daodu argues is insufficient to meaningfully soak up supply. 

Looking ahead, Daodu points to one potential catalyst that could change the dynamics: the long-awaited US crypto market structure bill, the CLARITY Act, which has faced significant opposition in recent months due to key provisions that have prevented its passage. 

If the bill becomes law and formally cements XRP’s status as a commodity, Daodu argues, it would reduce regulatory uncertainty and could unlock broader institutional adoption. 

That in turn might encourage banks to settle in XRP rather than relying on alternatives such as Ripple’s RLUSD stablecoin, creating the kind of demand pressure that could finally push the price out of its current range.

In short, Daodu’s view is that XRP needs multiple things to shift at once: a change in capital flows away from Bitcoin, less selling from large holders, and materially larger ETF inflows—or a regulatory development that brings institutions on board. 

Until several of those factors move together, the analyst says, XRP rallies are likely to remain short‑lived and the token stuck near its recent trading band.

Featured image from OpenArt, chart from TradingView.com