The price of XRP has fallen below $2, erasing most of the recovery since the beginning of the year. Meanwhile, XRP balances on multiple major exchanges are increasing. This trend is raising concerns about further downside risk.
This decline occurred due to geopolitical tensions that led investors to adopt a risk-averse stance, coinciding with a general weakness in the market. However, many analysts continue to show a bullish stance on XRP for 2026.
In January, XRP exchange reserves and whale transactions surged.
According to CryptoQuant data, in January 2026, reserves of XRP significantly increased at major exchanges like Binance and Upbit.
This chart shows that investors have consistently moved XRP to exchanges since the beginning of the year. As a result, Binance's balance reached 2.72 billion XRP, and Upbit reached about 6.3 billion XRP. In total, the reserves on exchanges accounted for approximately 10% of the circulating supply.
In particular, a clear inverse correlation is emerging between Upbit's balance and XRP prices. Since the first week of January, when Upbit's reserves began to increase, XRP has dropped from $2.40 to $1.83. This trend indicates that Korean investors have a significant impact on XRP prices.
Another on-chain metric to note is the Whale Exchange Transactions on Binance. This is a measure of the number of transfers between whales and exchanges, indicating how actively large holders are moving their assets in and out.
The increase in exchange reserves and the activation of whale transactions may further intensify selling pressure. Data suggests that more whales are moving XRP to exchanges.
Furthermore, since the launch of the XRP ETF in November 2025, there have been only two days of outflows. The first was on January 7, when $40.8 million flowed out of the fund. The second and largest outflow occurred on January 20, when $53.32 million flowed mainly from Grayscale GXRP. The sales on January 20 were due to the entire U.S. market moving towards risk aversion after President Trump hinted at tariffs on European NATO member countries.
Recent price analysis by BeInCrypto points out that if inflows stagnate and turn negative, it could signal a cessation or retreat in demand from institutional investors.
On the other hand, XRP has lost almost all of its rebound since the beginning of the year and is currently trading at a critical support level of $1.88. Previous analyses have warned that falling below this level could lead to an additional 45% decline, potentially dropping the price below $1.
While there are these risks, several factors could alleviate the selling pressure on XRP. Token Relations' latest report highlights that trading volume for the XRP ETF significantly improved in January. The report also notes an increasing trend in demand for DeFi products on the XRP Ledger (XRPL).
"In December 2025, the XRP ETF saw an inflow of $483 million, while the Bitcoin ETF recorded an outflow of $1.09 billion during the tax loss harvesting season. This trend suggests that institutional investors are rotating from Bitcoin to XRP ahead of 2026. Liquidity remains strong, with stable trading of $20 million to $80 million worth being processed daily. The launch of the altcoin ETF has surpassed expectations in terms of establishment, with daily inflows being perceived not as speculation, but rather as part of a systematic asset allocation strategy," Token Relations reports.
Despite these two outflow dates, as of January 23, the total net inflow amount is $1.23 billion, and the total net asset value remains at $1.36 billion. Analysts point out that this outflow was not a change in sentiment towards XRP itself, but rather a movement driven by macro factors.
Recently, Ripple has continued to expand the use cases for RLUSD, a stablecoin on the XRP Ledger. This movement is accelerating through partnerships with multiple countries and institutions. Such positive developments could realistically support the price of XRP. If the token maintains $1.88 and inflows into the ETF continue, a retest of $2.40 may be in sight. However, if it falls below the support, $1.25 will become the focal point.
