XRP finds itself in a strange position this week. On one hand, traders just watched millions in leveraged positions get wiped out. On the other, institutional money keeps flowing in through regulated products. The result is a market that looks chaotic on the surface but may be quietly building something underneath.
Here’s how both sides of the story line up.
Leverage Flush Sends XRP Below $2
On January 20, over $5 million in XRP long positions were liquidated as fears over potential EU tariffs on U.S. goods sparked a broad crypto selloff. Binance alone accounted for more than $1 million in forced closures.
This wave of liquidations pushed XRP briefly below the $2 mark before price stabilized near $1.96. The move did not come from XRP-specific news. It came from macro pressure tied to geopolitics and risk-off sentiment across global markets.
That matters because forced selling creates fast and exaggerated price drops. It also weakens short-term confidence and keeps volatility elevated. From a trader’s view, this kind of move looks bearish. From a market structure view, it often clears excess leverage and resets positioning.
Institutional Capital Keeps Flowing In
While retail leverage was getting flushed out, capital moved in through a very different channel.
XRP-focused funds attracted $70 million in inflows last week, placing XRP behind only Bitcoin and Ethereum among crypto investment products. This came shortly after four U.S. spot XRP ETFs launched, giving institutions a clean, regulated way to gain exposure.
This shift is important. It reduces reliance on speculative retail trading and introduces longer-term holders into the market. These flows tend to be slower, steadier, and less sensitive to intraday noise.
Price action has not reflected that demand yet, but historically, sustained inflows into ETFs and funds tend to show their impact over time, not overnight.
Key Support Holds for Now
Technically, the XRP price continues to defend the $1.85–$1.93 support zone, a level that has held since mid-December. Buyers have consistently stepped in around this area, preventing a deeper breakdown.
Momentum indicators remain neutral, which fits the current behavior: neither panic nor strong expansion, just consolidation after volatility.
For upside, the market needs to reclaim the $2.10–$2.20 range. That zone capped recent rebounds and remains the level to watch for any trend shift. Failure to hold $1.85 would expose XRP to a deeper retracement, but for now, that floor is intact.
What This Means Going Forward
XRP is caught between two opposing forces.
Short-term traders are reacting to macro headlines and liquidations, driving sharp but temporary price swings. At the same time, institutional capital continues to build exposure quietly through regulated products.
This does not confirm an immediate rally, but it does weaken the case for a sustained collapse driven purely by internal weakness.
If the broader market stabilizes and macro pressure eases, XRP has the structure and capital backing to recover. If geopolitical risks escalate, volatility will stay high, regardless of how strong the underlying demand may be.
For now, XRP is neither in clear breakdown nor confirmed breakout mode. It is in a transition phase, and those are often the moments that decide the next major move.