XRP Price Prediction: Can ETF Demand Overcome Trade War Fears and Spark a Rally?

XRP has faced significant selling pressure, declining for six consecutive days to trade around $1.98, as escalating US-EU trade tensions and delays in US crypto legislation rattled investor sentiment.

Despite briefly falling below $1.85, the token found support, with its medium-term outlook buffered by robust demand for XRP-spot Exchange-Traded Funds (ETFs). Technical analysis shows XRP trading below its key 50-day and 200-day Exponential Moving Averages (EMAs), signaling bearish momentum in the short term. However, fundamental drivers like increasing XRP utility and the potential passage of pro-crypto laws in the US provide a foundation for a potential reversal, with analysts eyeing medium-term targets of $3.00 and beyond.

XRP Under Pressure: Decoding the Six-Day Decline

The past week has been challenging for XRP holders. The token recorded its sixth straight day of losses on January 19, closing at approximately $1.9837 and reflecting a broader downturn in cryptocurrency markets. This persistent decline was primarily triggered by macro-economic anxieties. Over the weekend, the announcement of new US tariff threats against several European nations sent shockwaves through global risk assets, including cryptocurrencies. This geopolitical friction raised fears of a renewed trade war, prompting investors to retreat from volatile assets.

Compounding the negative sentiment were developments in Washington. The US Senate Banking Committee’s decision to postpone a crucial markup vote on crypto market structure legislation created uncertainty, dampening hopes for a near-term regulatory clarity that the market craves. This one-two punch of geopolitical and regulatory uncertainty proved too much for bullish momentum to withstand in the short term. XRP’s price action mirrored this anxiety, plunging to an intraday low of $1.8502 before managing a partial recovery to reclaim the $2 level briefly.

This price behavior highlights XRP’s ongoing sensitivity to external market forces and regulatory headlines. While the asset has developed stronger fundamental use cases, it remains susceptible to the ebb and flow of global investor risk appetite. The rapid sell-off and subsequent partial recovery suggest a market grappling with conflicting signals: fear of immediate macro risks versus confidence in the token’s longer-term trajectory. This clash between technical selling pressure and underlying fundamental support is defining the current consolidation phase.

Fundamental Analysis: The Bullish Pillars Supporting XRP

Beneath the surface of recent price volatility, several strong foundational pillars continue to support a constructive medium-term view for XRP. The most significant among these is the sustained and robust demand for XRP-spot ETFs. These regulated investment vehicles have opened the doors for institutional and traditional finance capital to gain exposure to XRP, creating a steady source of buying pressure that did not exist in previous cycles. Continued net inflows into these ETFs are a critical metric to watch, as they directly signal professional money managers’ confidence in the asset.

Alongside institutional adoption, the growing utility of the XRP Ledger (XRPL) and its native token in cross-border payments and other financial applications provides a tangible use case that supports its value proposition. Furthermore, the ongoing progress—despite delays—toward a coherent crypto regulatory framework in the United States represents a potential massive catalyst. The passage of clear legislation would reduce a major overhang of uncertainty for the entire industry and could specifically benefit established tokens like XRP with clear use cases.

The convergence of these factors—ETF demand, increasing utility, and regulatory maturation—is expected to tilt the supply-demand balance in XRP’s favor over time. This fundamental thesis suggests that the current price weakness may be more of a temporary reaction to external shocks rather than a reflection of deteriorating project health. For long-term investors, these pillars offer a rationale for looking past short-term chart fluctuations and focusing on the broader adoption narrative.

Technical Outlook: Key Levels for the Next Move

From a chart perspective,** **XRP’s recent slump has placed it in a technically precarious but potentially opportunistic position. The six-day decline has pushed the price below both the 50-day and 200-day Exponential Moving Averages (EMAs), which traditionally indicates a bearish near-term bias and defines the path of most immediate resistance.

XRP Critical Price Levels to Monitor

* Immediate Support: The recent low of $1.85 is the first critical line in the sand. A sustained break below this level could trigger further selling toward $1.75 and potentially $1.50.

* Key Resistance: The 50-day EMA, currently near $2.0664, is the first major hurdle for any rebound. Beyond that, the 200-day EMA at approximately $2.3117 and the psychological $2.50 level are the next targets.

* Bullish Targets: A decisive move above the EMAs could open the path toward $3.00 in the medium-term (4-8 weeks), with a longer-term (8-12 weeks) target of $3.66—XRP’s all-time high on Binance.

The token’s Relative Strength Index (RSI) and other momentum oscillators are likely approaching oversold territories after such a prolonged drop, which can often precede a technical bounce. The key for traders is to watch for a confirmed breakout above the $2.00 level with significant volume, which could pave the way for a test of the 50-day EMA. Conversely, failing to hold the $1.85 support zone would invalidate the short-term bullish structure and likely lead to a test of lower supports. The current setup presents a classic tension between bearish technical indicators and supportive fundamental drivers, setting the stage for a potentially volatile resolution.

On-Chain Insights: A Market in Distribution

A deeper look at on-chain data reveals a nuanced picture that explains some of the persistent selling pressure. According to metrics like Glassnode’s Realized Price by Age, a distribution pattern has emerged similar to that seen in early 2022. The data indicates that short-term holders (those active in the past week to month) are accumulating** XRP at prices **below the average cost basis of the medium-term cohort (holders of 6-12 months).

This structure is significant because it creates latent selling pressure. Medium-term holders who are underwater on their positions may be more inclined to sell into any price recovery to break even, thereby capping upward momentum. This dynamic suggests the market is in a phase of consolidation and redistribution, where assets are moving from weaker hands (those seeking an exit) to potentially more convicted ones (those accumulating at lower prices), rather than embarking on a clear, sustained uptrend.

Further supporting this view is the increase in the total supply of XRP held at a loss, which has risen following the retracement from late-2025 highs. Historically, elevated levels of “supply in loss” correlate with weaker price performance and increased volatility, as holders become more sensitive to price movements. For a robust, sustainable bull run to begin, the market likely needs to see either a prolonged period of base-building that allows cost bases to converge or a powerful surge of new demand that can absorb this overhead supply.

Risk Assessment: What Could Derail the Bullish Thesis?

While the medium-term outlook for** **XRP is cautiously optimistic, several credible risks could challenge this trajectory. The most immediate threats are macroeconomic and geopolitical. An escalation of trade tensions between the US and EU, leading to actual implementation of tariffs and retaliatory measures, would undoubtedly spook risk markets again and likely send XRP lower. Furthermore, a shift in central bank rhetoric—particularly if the Federal Reserve signals a more hawkish stance or delays expected interest rate cuts—could strengthen the US Dollar and put pressure on all crypto assets.

Specific to XRP, a sudden and sustained run of outflows from XRP-spot ETFs would be a major red flag, indicating a withdrawal of institutional support. Finally, further delays or outright opposition to crypto-friendly legislation in the US Senate would prolong the regulatory uncertainty that has weighed on the sector. Any combination of these factors could force XRP into a sustained bearish trend, breaking key support levels and invalidating the current recovery thesis. Investors should monitor these fronts closely alongside price action.

Strategic Outlook and Price Targets for 2026

Navigating the current environment requires a balanced view that respects both technical weakness and fundamental strength. In the short-term (1-4 weeks), the market’s direction will likely hinge on the resolution of trade tensions and XRP’s ability to reclaim and hold above the $2.00 resistance level. A successful breakout could target a move toward $2.50 as an initial rally point.

The medium-term (4-8 weeks) outlook is more fundamentally driven. Provided ETF inflows remain positive and regulatory news does not turn overtly negative, a move toward $3.00 is a plausible target. This would represent a significant recovery and reaffirm the bullish market structure.

Looking further ahead, the longer-term (8-12 weeks) and beyond target remains a retest of the all-time high at $3.66. Achieving this milestone would likely require a “perfect storm” of bullish catalysts: a clear US regulatory framework being passed, a dovish pivot from global central banks, and continued expansion of XRP’s utility in payment systems. While ambitious, this target is within reach if the fundamental pillars continue to strengthen. The path will unlikely be linear, but for patient investors, the convergence of institutional adoption, regulatory clarity, and real-world utility paints a promising picture for XRP’s journey through 2026.

FAQ

What is causing XRP’s price to drop recently?

XRP’s recent decline is primarily due to two external factors: heightened geopolitical risk from US-EU trade tensions, which spooked global risk markets, and delays in anticipated US cryptocurrency legislation, which created regulatory uncertainty.

What are the key support and resistance levels for XRP?

The crucial immediate support is at** **$1.85; a break below could lead to tests of $1.75 and $1.50. Key resistance levels start at the 50-day EMA (~$2.066), followed by the 200-day EMA (~$2.3117) and the $2.50 level.

Why are analysts still bullish on XRP despite the price drop?

The bullish medium-term case rests on strong fundamental pillars: consistent demand from XRP-spot ETFs, which brings institutional capital; growing real-world utility for cross-border payments; and the eventual high probability of clearer, crypto-friendly US regulations.

What is the price prediction for XRP in 2026?

Based on current fundamentals, analysts see a medium-term (4-8 week) target of** $3.00 if supportive conditions hold. The longer-term (8-12 week) goal is a retest of the all-time high at **$3.66, especially if key regulatory and macroeconomic catalysts align.

What are the biggest risks to the XRP price forecast?

Major risks include: an escalation of US-EU trade wars, sustained outflows from XRP-spot ETFs, a hawkish shift from central banks delaying rate cuts, and further setbacks or opposition to crypto legislation in the US Congress.