XRP is exhibiting strong on-chain fundamentals and institutional interest despite its muted price action around the $2 level. Analysis of recent data points to a market potentially transitioning from a distribution phase into a prolonged compression with an upward bias, driven by strategic whale accumulation and consistent ETF inflows.
On-chain metrics reveal a significant shift in holder behavior. Over the past 90 days, the XRP/USD pair has been in a "taker buy dominant" phase, where market buy orders have consistently outweighed sell orders, indicating steady absorption of supply. The 90-day Cumulative Volume Delta (CVD) has turned positive and is trending higher, reflecting conviction-driven accumulation that historically precedes volatility expansion after consolidation.
Whale activity has intensified notably. According to analyst Ali Charts, wallets holding at least one million XRP collectively added more than 50 million tokens over the past week. Furthermore, data from CryptoQuant and Santiment shows that long-term holders acquired approximately 720 million XRP over a three-day period ending January 11, coinciding with a price dip, signaling dip-buying behavior rather than speculative momentum chasing.
Institutional engagement through Exchange-Traded Funds (ETFs) adds another layer of support. Since November, XRP ETF accumulation has been heavily one-sided, with inflows vastly outweighing outflows. On January 16 alone, XRP spot ETFs recorded inflows of approximately $10.63 million, bringing total assets under management to around $1.56 billion. This pattern suggests long-term allocation strategies that tighten circulating supply.
From a technical perspective, XRP is trading in a tightening range between $2.00 and $2.40, having recently faced resistance near its 200-day Exponential Moving Average (EMA). Analysts note the daily chart is forming a higher high, marking a shift from previous lower-high structures. However, caution persists as a bearish "M pattern" has emerged on the four-hour timeframe, which could signal a reversal if support at $1.80 is lost with elevated volume.
Derivatives data presents an asymmetric risk profile. Current funding rates remain negative, indicating dominant short positioning in leveraged markets. Historically, such pessimistic sentiment has often coincided with local bottoms, as excessive short exposure reduces the likelihood of aggressive downside continuation. A normalization or flip to positive funding rates could catalyze upward price action.
The consensus among analysts is that XRP remains in a transitional phase. While whale accumulation, ETF inflows, and improving chart structure are constructive signals, they require confirmation through volume expansion and a sustained break above key resistance. A failure to hold the $2.00 support would invalidate the current bullish setup.
