XRP Faces Mounting Pressure Amid Market-Wide Correction

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The XRP token began the week on a weak footing, extending losses from a turbulent weekend. The cryptocurrency dropped to $1.80, accompanied by a dramatic 214% surge in trading volume to $3.34 billion. This volatility aligns with a broad-based market correction that triggered $745 million in liquidations across the digital asset sector.

After finding temporary support at the $1.80 weekend low, XRP is currently trading near $1.90. This represents a significant retreat from its January peak of $2.37. The decline is even more pronounced from its all-time high of $3.66, reached in August 2025 following the resolution of the SEC's lawsuit against Ripple. From that pinnacle, XRP has shed nearly 48% of its value.

On-chain analytics reveal a cautious network environment. Active addresses on the XRP Ledger have decreased to 49,500. Furthermore, the percentage of XRP holdings currently in profit has fallen sharply to 50.4%, down from 77.2% at the start of the year. A notable trend is the accumulation of tokens on exchanges. Reserves on Binance and Upbit alone now exceed 9 billion XRP, accounting for roughly 10% of the circulating supply.

One potentially positive technical signal is the MVRV indicator, which has dipped to -5.7%. Historically, such negative readings can suggest an asset is undervalued.

Spot ETF Outflows Add to Selling Pressure

XRP spot ETFs, launched in November 2025, initially attracted cumulative inflows of $1.23 billion. However, this trend has recently reversed. On January 20, these funds experienced an outflow of $53.32 million, marking their largest single-day withdrawal to date. Market observers attribute this shift to heightened risk aversion in US markets, sparked by former President Trump's tariff threats against European NATO allies.

Despite the recent weakness, Ripple CEO Brad Garlinghouse expressed continued optimism during the World Economic Forum in Davos. "I remain very bullish and predict we will see a new all-time high," he stated. This view finds some echo among institutional analysts; strategists at Standard Chartered have published forecasts for XRP to reach $8 this year and $12.50 by 2028.

A Bright Spot: Ripple's Stablecoin Gains Traction

While XRP struggles, Ripple's USD-pegged stablecoin, RLUSD, is demonstrating robust growth. Since its December 2024 debut, its market capitalization has expanded to $1.33 billion, representing a staggering 1,278% increase since the beginning of the year. This growth propels RLUSD into 10th place among USD-backed stablecoins. Its reach is set to widen further following Binance's January 21 announcement that it will list RLUSD trading pairs.

Concurrently, Ripple is forging new institutional pathways. The company is collaborating with Riyad Bank in Saudi Arabia on a pilot for blockchain-based payments, a project aligned with the Kingdom's Vision 2030 economic strategy.

Technical Outlook and Market Sentiment

From a chart perspective, the Relative Strength Index (RSI) has recovered to 42, which could allow for a short-term technical rebound. However, significant moving averages pose overhead resistance at $2.03, $2.16, and $2.29. The MACD indicator remains in negative territory. The immediate market expectation is for consolidation between $1.85 and $1.95.

Open interest in XRP futures contracts has declined from $4.55 billion to $3.26 billion, indicating waning speculative interest from retail traders. The upcoming US Federal Reserve interest rate decision on Wednesday is anticipated to provide the next major directional catalyst for markets. Reclaiming the $2.00 level would be viewed as an initial positive signal for XRP. Conversely, a sustained break below $1.80 could invite further downward pressure.