Market Correction and ETF Inflows
Spot XRP exchange-traded funds (ETFs) have continued to attract investor interest, recording inflows every day of last week as transactions surged to a six-month high. Unfortunately, these positive fundamentals did not help the bulls hold the price above the psychological $2 support level.
XRP fell below $2 in a 6-day correction as trade war fears, stemming from President Trump's Greenland tariff threats, triggered market-wide sell-offs. Despite strong fundamentals, such as $1.28 billion in cumulative ETF inflows and a surge in XRP Ledger transactions to a six-month high, investor sentiment failed to lift the price.
XRP Price Under Exchange Reserves Surge
XRP extended its correction on Monday, dropping below the $2 psychological level and marking six consecutive days of declines. The sell-off has spread across the cryptocurrency market, with Bitcoin (BTC) falling to $92,000 and Ether (ETH) pressing down on support at $3,000. This downturn was triggered by U.S. President Trump's weekend threat of new tariffs on European countries, specifically concerning the purchase of Greenland, sparking fears of renewed trade wars.
More than $788.9 million in long positions were liquidated, with Bitcoin accounting for $224 million of that total. XRP saw $39.5 million in long liquidations, the highest amount since November 22, 2025. Across the market, a total of $875 million was wiped out from short and long positions, affecting approximately 250,000 traders.
Meanwhile, demand for XRP derivatives has remained weak, falling to $3.56 billion on Monday from its yearly high of $4.55 on January 6, representing a 21.7% decline. A further decline in open interest could accompany lower prices, similar to what was observed in October 2025.
XRP Price Ignores ETF Demand and On-Chain Activity
The six-day price correction is occurring even as institutional sentiment remains relatively positive, as reflected in the steady inflows into U.S.-based XRP spot ETFs. According to data from SoSoValue, XRP ETFs added $1.12 million on Friday, bringing cumulative inflows to $1.28 billion and total assets to over $1.52 billion. The Franklin XRP ETF (XRPZ) was the only XRP ETF with inflows on Friday, bringing its net assets to $287.75 million.
Global XRP investment products also attracted $69.5 million in inflows during the week ending January 16, signaling steady demand from institutions. XRP has also seen an increase in on-chain demand, evidenced by the surge in transactions to a six-month high last week. Data from XRPScan shows that the number of transactions executed on the XRP Ledger soared to 2,575,561 on Wednesday, levels last seen in July 2025.
Despite this robust network usage and persistent ETF demand, XRP price has underperformed, dropping 18.5% from its eight-week high of $2.41 reached on January 6. Stronger technical validation and high volumes across spot and derivatives markets would be needed to confirm a breakout to higher levels.
XRP Price Must Hold $1.80
The XRP/USDT pair is currently testing a daily order block around $1.96, a level with strong support, according to data from Glassnode. The cost basis distribution heatmap reveals that more than 1.78 billion XRP were bought around this level over the last six months. The next significant support sits at $1.78 and $1.80, where investors acquired approximately 1.84 billion XRP.
The XRP/USD pair has not closed a daily candlestick below this level since April 2025, and bulls must defend it to avoid a deeper correction. If the price breaks below this level, it could drop toward the green zone shown below, supported by the $1.61 local low and the 200-week exponential moving average (EMA), which is approximately $1.41 and represents the last line of defense for the XRP price.
Unfortunately for the bulls, XRP’s downside momentum is increasing based on the relative strength index (RSI), which has hit its lowest level in 2026. A break below the support line of a descending channel at $2 will see the XRP/USDT pair extend the decline to $1.75 and subsequently to the October 10 low of $1.61.