As of late January 2026, XRP trades near $1.80–$2.00 support after a 19% drop from its early-January high. Perpetual futures funding rates have turned sharply negative, indicating crowded short positions and latent buying pressure, per CryptoQuant.
This pattern repeated in August–September 2024 and April 2025, each time preceding strong rebounds. Negative funding means shorts pay longs – a classic squeeze setup when price begins to rise.
Santiment data shows XRP sentiment in “extreme fear”, a historically reliable contrarian buy signal. When retail becomes overwhelmingly bearish, selling often exhausts and price reverses.
XRP balances on exchanges continue to decline. Binance reserves sit at multi-year lows, with holdings down roughly 45% over the past year (from $10.16B to $5.55B equivalent), per CoinGlass.
Meanwhile, four new U.S. XRP ETFs (launched late 2025) have absorbed $1.37 billion in net inflows with zero outflow days. This steady institutional demand contrasts sharply with thinning sell-side liquidity on exchanges.
Network activity also supports the bullish case: XRP Ledger daily transactions rose over 50% in mid-January, approaching 1 million, signaling genuine usage growth beyond speculation.
Analyst Ali Martinez identifies $1.78 as strong support, where XRP has consistently bounced. The $1.97–$2.00 zone remains key resistance; a decisive break above could target $2.40–$2.60 initially, then accelerate.
Longer-term forecasts diverge:
Most models cluster between $2.70 and $8.60, with $4–$5 as a realistic peak under strong but not euphoric conditions.
The combination of crowded shorts, institutional accumulation, and extreme retail fear suggests XRP may be building energy for another explosive move – similar to the 2025 rally – once the next catalyst arrives.
