Institutional Investors Seize Opportunity as XRP Faces Price Weakness

XRP 3604058040CR

While retail sentiment around XRP appears to have hit a low point, a significant divergence is unfolding behind the scenes. The current price decline, which has seen the asset searching for a stable footing, is being interpreted not as a warning signal but as a strategic entry point by major financial institutions. These professional investors are substantially increasing their holdings, even as many individual traders capitulate following recent losses.

The foundation for this institutional interest was laid in 2025 through critical regulatory advancements. The resolution of the SEC lawsuit in August provided the necessary legal clarity by classifying XRP as a "non-security." Furthermore, Ripple secured preliminary approval as a National Trust Bank from U.S. regulators in December, a move that further strengthens its bridge to the traditional financial sector. This regulatory certainty forms the core thesis for professional investors looking beyond short-term volatility.

ETF Inflows Defy Market Sentiment

This long-term confidence is visibly translating into action through exchange-traded funds. Since the launch of XRP spot ETFs in mid-November, these products have recorded 28 consecutive days of net inflows. As of Christmas Day, the cumulative new capital has surpassed $1.13 billion.

Specific asset managers are taking prominent positions. Franklin Templeton's ETF (XRPZ) now holds verified reserves exceeding 53 million XRP. Canary Capital continues its aggressive accumulation strategy. This sustained buying pressure starkly contrasts with the prevailing market anxiety, suggesting a calculated bet on future appreciation.

Should investors sell immediately? Or is it worth buying XRP?

On-Chain Data Reveals a Supply Squeeze

Blockchain analytics provide context for the current price pressure and hint at a potential supply crunch.

• Exchange Reserves Dwindle: The supply of XRP held on the Binance exchange has fallen to a six-month low of 2.66 billion tokens. This movement of assets into private wallets, or cold storage, typically indicates a reduced willingness to sell at present price levels.
• Ripple's Treasury Activity: A transfer of 65 million XRP (approximately $121 million) by Ripple on December 23rd sparked speculation. Such movements often precede sales or liquidity provisions, which can temporarily increase market supply and contribute to near-term weakness.

The Technical and Psychological Battlefield

From a chart perspective, the situation remains tense. The breach below the psychologically significant $2.00 level reflects short-term uncertainty. Currently trading around $1.87, XRP has extended its distance below the 50-day moving average to over 11 percent, with technical analysis suggesting a potential test of support near $1.75.

However, this snapshot obscures the larger narrative shaping the start of 2026: a massive divergence between price action and institutional accumulation. As long as ETF inflows continue at their current pace, institutional addresses are systematically absorbing the supply being sold by unsettled retail investors. The dominant pattern is not one of broad abandonment, but of a strategic transfer of assets from weak hands to strong ones.