XRP Rally Under Pressure: Can The Momentum Hold?

Market Snapshot - XRP trades near critical juncture at $2.09, up 4.18% in 24 hours - Exchange reserves plummet to 1.6B tokens, the lowest since 2018 - Whale positioning and institutional ETF inflows reshape liquidity dynamics - Technical structure remains fragile despite recent gains

The Supply Squeeze: A Bullish Signal From On-Chain Data

XRP’s latest price action unfolds against a backdrop of tightening token availability. On-chain metrics reveal exchange balances have compressed to roughly 1.6 billion XRP, down sharply from the 3.76 billion recorded in October. According to Glassnode, this represents levels unseen since 2018, signaling that holders are systematically withdrawing coins from trading venues.

This dynamic typically foreshadows reduced selling pressure and hints at accumulation behavior. Market participants interpret such moves as foundational for sustained price recovery, particularly as we head deeper into 2026. The data suggests conviction from longer-term players rather than panic exits.

Institutional Demand And Outflow Records

A more dramatic picture emerges when examining outflow patterns. Recently, 1.4 billion XRP migrated off exchanges in a single day, marking the largest such event on record. Analysts attribute this surge to whale accumulation activities and ETF-related demand, with institutions and long-term holders securing positions in cold storage or custody solutions.

This shift carries broader implications: XRP ETFs have become a vehicle for institutional-grade asset positioning. Year-to-date, XRP-focused funds have attracted approximately $478 million, underscoring growing interest from the institutional ecosystem. As these products mature, they contribute to liquidity compression and reduced spot market availability.

Technical Reality: Recovery Faced With Headwinds

Price recovery near $2.09 masks underlying technical weakness. XRP remains positioned below major moving averages—specifically the 30-day SMA at $1.97 and the 200-day SMA at $2.57. While the coin rebounded from the 78.6% Fibonacci support around $1.87 and showed a MACD bullish crossover, these positive signals lack conviction.

24-hour volume of $1.74 billion, down 18% from prior levels, reflects anemic trading activity and hesitant market participation. Low volume during rallies often signals exhaustion rather than sustainable buying. The broader macro environment reinforces caution, with Bitcoin dominance lingering near 59%, leaving limited room for altcoin leadership.

Holding The Line: What Comes Next

The path forward hinges on price action around $1.87 to $1.90. On-chain records show 1.87 billion XRP accumulated at $1.78, establishing a robust support foundation. Defending this zone remains critical for sustaining positive momentum heading into 2026.

A convincing move above $1.90–$2.00 would signal structural improvement and potentially unlock broader recovery potential. Conversely, a break below $1.87 risks reigniting downside pressure, particularly given elevated Bitcoin dominance limiting alternative narrative strength.

The verdict: XRP’s ability to sustain its rebound remains contingent on volume recovery and fresh catalysts. Current technicals warrant caution despite bullish on-chain signals. The coming weeks will test whether institutional positioning and supply constraints can drive meaningful price discovery or if medium-term headwinds ultimately prevail.