XRP Dips Below Key Threshold Amid Regulatory Uncertainty

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The digital asset XRP began the trading week under pressure, declining past the psychologically significant $2.00 level. A combination of geopolitical friction and stalled regulatory progress has weighed on investor sentiment. However, a contrasting signal emerges from institutional investment flows, creating a complex picture for the cryptocurrency.

Despite the downward price movement, data reveals sustained institutional interest. Spot ETFs tracking XRP attracted net inflows totaling $56.83 million last week, suggesting major investors view the dip as a potential buying opportunity.

• The Grayscale XRP ETF saw inflows approaching $24 million.
• The Bitwise XRP ETF gathered more than $18 million in new capital.

This accumulation coincides with robust underlying network activity. The XRP Ledger, for instance, recorded a 180-day high in daily transactions as recently as January 16.

Regulatory and Macroeconomic Headwinds

The primary drivers for the current price retreat stem from political and regulatory delays. Hopes for swift regulatory clarity were dampened by a postponed vote on the "Market Structure Bill" in the U.S. Senate. This delay was partly triggered by crypto exchange Coinbase withdrawing its support; the firm criticized proposed amendments that would prohibit rewards for Stablecoin holdings—a point of concern for U.S. banks fearing significant deposit outflows.

Broader macroeconomic tensions are also impacting risk assets. Fears of retaliatory measures from the EU were stoked by former U.S. President Trump's announcement of planned tariffs on imports from several European nations, further unsettling the market environment.

Technical Perspective and Forward Look

From a chart analysis standpoint, short-term conditions appear strained. Trading at approximately $1.96, XRP currently sits below its key 50-day and 200-day moving averages. Nonetheless, its Relative Strength Index (RSI) reading of 28.8 indicates an oversold condition, which could potentially set the stage for a technical rebound.

Market attention is now fixed on January 27. On this date, the U.S. House Agriculture Committee is scheduled to present and vote on its draft market structure legislation. A signal of progress from this event, coupled with a successful defense of the $1.85 support level, could rapidly improve the outlook for XRP.