XRP Today's News: ETF inflows for 8 consecutive weeks, breaking above the 50-day moving average to challenge $2.2

XRP continues to rise for 4 days, with a total increase of 20%, reaching the 2.2 USD resistance level for the first time on January 5th. The catalyst is the Senate’s support for the Market Structure Bill to be reviewed on January 15th with bipartisan backing. Spot ETF inflows have continued for 8 consecutive weeks, totaling 1.18 billion USD, breaking above the 50-day moving average, with active accounts reaching a new high. Target prices: short-term 2.5 USD, mid-term 3.0 USD, long-term 3.66 USD.

Market Structure Bill Catalyzes XRP Decoupling from Bitcoin

The announcement by the U.S. Senate Banking Committee on December 31st has become the most important catalyst for XRP today. The committee announced it will review the Market Structure Bill on January 15th, with legislators stating the bill has bipartisan support, raising expectations for crypto-friendly regulation to take effect in Q1. Notably, since the announcement, XRP has risen 20%, triggering a reversal of the bullish trend.

XRP is far more sensitive to legislative developments than other cryptocurrencies. Due to the prolonged legal dispute between Ripple and the SEC, XRP’s legal status has long been uncertain. If the Market Structure Bill passes, it will clarify XRP as a non-security, alleviating institutional legal concerns. This certainty premium is far more influential than Bitcoin’s price volatility. Historical data shows that when the bill passed the House in July 2024, XRP surged 14.69% in a single day. If the Senate passes it and it is signed into law by Trump, the increase could be even more remarkable.

The decoupling trend between XRP and Bitcoin is accelerating. In stark contrast to the US Bitcoin spot ETF, which has seen outflows of 2.26 billion USD since November 14th, XRP spot ETF continues to see net inflows for 8 weeks straight. The divergence in capital flows has sparked market expectations for XRP’s independent rally. XRPBTC rose 9.89% in January, highlighting XRP’s higher sensitivity to legislative developments and spot ETF demand.

Lawyer Bill Morgan, who supports cryptocurrencies, discussed XRP’s long-term price trend, advocating its decoupling from the crypto market. He pointed out that over the past 3 and 5 years, XRP has performed significantly better than Bitcoin and Ethereum. Buying XRP after the SEC lawsuit in January 2021 or before the Torres case ruling in January 2023 would have yielded better returns than buying Bitcoin or Ethereum at the same time. This independence stems from XRP’s utility and regulatory narrative, rather than pure speculation.

XRP Spot ETF Inflows for 8 Weeks Break Supply-Demand Balance

As of the week ending January 2nd, the US XRP spot ETF market saw a net inflow of 43.16 million USD. This marks 8 consecutive weeks of net inflows, further strengthening XRP’s supply-demand balance. Since the launch of XRP spot ETF, net inflows have reached 1.18 billion USD, indicating strong institutional demand.

The impact of ETF capital inflows on XRP’s price is not only through direct buying but also through liquidity contraction. When institutions purchase XRP via ETFs, these tokens are usually locked in custodial wallets, reducing circulating supply over the long term. Unlike retail traders who trade frequently, institutional holdings are more stable. This “lock-up effect” reduces tradable supply, amplifying price sensitivity to demand changes.

Eight weeks of continuous net inflows create a market expectation: investors are beginning to believe that demand for XRP spot ETF is sustainable rather than a fleeting speculative craze. This expectation itself attracts more capital, creating a self-reinforcing positive cycle. In contrast to Bitcoin ETF outflows, the persistent inflows into XRP ETF indicate that investors are rotating into assets with practical utility, moving away from more volatile Bitcoin.

Three Major Supply and Demand Signals

(Source: Coinglass)

Active Accounts Rebound: Data from XRP Scan shows that on January 4th, the number of active accounts (unique senders) increased to 19,505, the highest level this month and the second highest since December 9th. The increase in active accounts indicates heightened on-chain transaction activity and increased network usage.

Exchange Balances Decline: Although specific data is not provided in the material, continuous ETF inflows are usually accompanied by declining exchange balances, as tokens are withdrawn to custodial cold wallets. This supply lock-up effect will amplify price elasticity when demand rises.

Institutional and Retail Dual Demand: ETF compliance needs are met by institutions, while the increase in active accounts shows retail participation is rebounding. The dual demand provides a more solid foundation for XRP.

Technical and Trading Strategy: $2.0 is a Key Support Level

(Source: Trading View)

On January 4th, XRP rose 3.59%, closing at 2.0908 USD, outperforming the overall crypto market’s 1.06%. The Sunday breakout pushed XRP above the 50-day moving average of 2.0468 USD but still below the 200-day EMA of 2.3458 USD. Moving averages show short-term bullish but long-term bearish signals, yet fundamentals are strengthening, offsetting the long-term technical bearishness.

Key technical levels include: support at 2.0 USD, 1.75 USD, and 1.50 USD; resistance at the 50-day moving average of 2.0468 USD; resistance at the 200-day moving average of 2.3458 USD; and overhead resistance at 2.5 USD, 3.0 USD, and 3.66 USD. Holding above the 50-day moving average would confirm a short-term bullish reversal, paving the way for testing the 200-day moving average and 2.5 USD resistance. Breaking above the EMA lines would reinforce the mid-term bullish outlook.

Reclaiming the 2.0 USD level and moving toward 2.2 USD significantly boosted market sentiment. If the 2.0 USD psychological support holds, the bullish pattern is solidified. Breaking through 2.2 USD would trigger an upward trendline, and sustained breakthroughs would validate the bullish structure, supporting mid-term targets of 3.0 USD and long-term targets of 3.66 USD. However, if the price faces resistance at the upward trendline and falls below the downward trendline, the bullish structure would fail, indicating a reversal to a bearish trend.

Major risks include: the Bank of Japan announcing an upward adjustment of the neutral interest rate range, triggering yen carry trades to unwind; the Federal Reserve lowering expectations for a March rate cut; MSCI removing digital asset reserve companies from its index; lawmakers opposing the Market Structure Bill; and XRP spot ETF experiencing capital outflows. These scenarios could lead the price down to 1.75 USD.