Regulatory Delay Weighs on XRP Amid Strong ETF Inflows

The price of XRP faced renewed selling pressure, declining to approximately $2.08 on January 16, 2026. This movement followed a decision by the U.S. Senate to postpone a vote on significant digital asset legislation, creating a headwind for the cryptocurrency. Despite this volatility, a notable contrast has emerged: spot exchange-traded funds (ETFs) dedicated to XRP continue to attract substantial capital, highlighting a divergence between short-term price action and institutional interest. The coming weeks are poised to test the durability of the $2 support level.

Despite the price decline, institutional appetite for XRP appears resilient. Since their launch in November 2025, XRP spot ETFs have accumulated net inflows totaling between $1.27 billion and $1.37 billion. These funds saw further inflows of nearly $5 million on January 15 alone, demonstrating consistent demand. This trend stands in stark contrast to Bitcoin ETFs, which experienced outflows of $1.26 billion over the same period, suggesting a potential strategic reallocation by some institutional investors who view XRP favorably despite regulatory uncertainties.

This sustained demand coincides with a tightening of available supply on cryptocurrency exchanges. Holdings on exchanges have dropped below 2 billion XRP tokens, a significant reduction from over 4 billion tokens held at the end of 2025. Such a supply contraction could amplify future price movements if demand continues to rise.

Legislative Setback Triggers Disproportionate Selloff

The regulatory delay has impacted XRP more severely than its peers. The catalyst was the withdrawal of support for the proposed Market Structure Bill by crypto exchange Coinbase on January 14. In response, the Senate Banking Committee promptly delayed its scheduled vote on the comprehensive regulatory package.

The market reaction was swift: XRP’s value fell by 6.2% within 24 hours. For context, Bitcoin retreated by only 2.8% during the same timeframe. This disproportionate sensitivity underscores XRP’s heightened reactivity to regulatory news, a legacy of the protracted legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC). However, Senator Bill Hagerty has indicated that an agreement could be reached "shortly," offering a glimmer of hope. The Senate Agriculture Committee has already scheduled its vote on the matter for January 27.

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

Technical Picture Hinges on Key Levels

From a chart perspective, XRP is trading just above its 50-day moving average near $2.08 but remains well below its 200-day average around $2.32. The $2 level represents a critical psychological and technical support zone. A sustained break below this threshold could open the path toward $1.75.

Immediate resistance is seen in the $2.17 to $2.22 range. A move above that zone would bring the January high near $2.40 into focus. Trading volume remained elevated during the recent decline, signaling active positioning by both buyers and sellers.

European Progress Offers a Strategic Offset

Beyond the U.S. regulatory landscape, Ripple is advancing its European strategy. The company has secured a preliminary e-money license in Luxembourg, a step that could pave the way for regulated payment services across the European Union. Furthermore, Ripple is seeking authorization as a crypto-asset service provider under the bloc's new Markets in Crypto-Assets (MiCA) regulation.

On-chain activity shows positive signs, with daily transactions on the XRP Ledger approaching 1 million in early January. Ripple also continued its scheduled release of 1 billion XRP from escrow, a monthly mechanism that is largely anticipated and factored in by the market.

The immediate future for XRP hinges on whether persistent institutional inflows can counterbalance the regulatory overhang. The January 27 vote in the Senate Agriculture Committee may provide the first clear directional signal.