XRP Short-term correction masks fundamentals strengthening: Why a 1.39% decline should not be overinterpreted

XRP has quoted $2.07 in the past 24 hours, down 1.39%. This short-term correction has attracted market attention. However, focusing only on this decline and ignoring the underlying market structure can lead to a trap of short-term sentiment. In reality, from on-chain data, institutional funds, regulatory progress to real-world application deployment, XRP is undergoing a neglected fundamental strengthening process. The short-term price consolidation may just be a normal pullback within this upward cycle, rather than a trend reversal signal.

Short-term pressure stems from the overall market correction, not XRP-specific issues

According to the latest data, the total market capitalization of cryptocurrencies has fallen about 1.09% in the past 24 hours, approaching $32.3 trillion, with mainstream assets also under pressure. This indicates that XRP’s decline is not due to deteriorating fundamentals but rather a decline in overall market risk appetite. Looking at the price trend, XRP reached a high of $2.41 on January 5, then gradually retraced to the current $2.07, giving back part of the gains from the past three weeks, but overall still showing a high-level consolidation pattern without signs of trend reversal.

The performance of key support levels is worth noting. The $2.02 level acts as a Fibonacci support and a short-term moving average support, which was touched in the past 24 hours (bottomed at $2.03) but not effectively broken. Analysts generally believe that the $2.22 to $2.39 range is a critical technical zone to confirm the sustainability of this upward move, and its performance will determine the subsequent trend direction.

On-chain data reveals a subtle shift in market structure

Although prices face short-term pressure, on-chain indicators tell a different story. According to on-chain monitoring data, transfers of XRP from whales to exchanges have fallen to their lowest levels in nearly two years. This indicator is often used as an important reference to judge whether whales are preparing to sell, and the current low level suggests a significant weakening of market selling pressure. Specifically, the amount of XRP transferred from whales to exchanges has dropped to around 48 million tokens, the lowest since 2021.

Meanwhile, XRP’s user base is steadily expanding. Since mid-December 2024, the number of new wallets on the XRP whale list has increased by over 25,000, setting a new monthly growth high. This growth is not concentrated in a single tier but covers all address ranges from the top 0.1% to the top 10%, indicating that funds of various sizes are increasing their holdings or entering the market anew. The total number of wallets holding XRP has increased from 7.41 million to over 7.51 million, with about 99,000 new addresses added in just the past month. Since July 2024, the total new wallets have exceeded 2.2 million.

The implication is clear: whale selling pressure is easing, and retail and institutional investors are continuing to enter. Although short-term prices are under pressure, the demand foundation is expanding, which helps alleviate selling pressure and enhances price resilience.

Institutional funds continue to flow in net, confidence remains intact

The performance of the US XRP spot ETF further confirms institutional recognition of XRP’s long-term value. According to the latest data, the US XRP spot ETF saw a net inflow of $17.06 million in the past 24 hours, with Grayscale XRP ETF recording a single-day inflow of $7.2 million and Bitwise XRP ETF inflow of $7.16 million.

More importantly, cumulative historical data shows: Grayscale XRP ETF’s total net inflow has reached $287 million, and Bitwise XRP ETF’s total net inflow has reached $310 million. The current total net asset value of XRP spot ETFs has reached $1.51 billion, with a cumulative net inflow of $1.27 billion. This scale of funds is significant in the altcoin ETF space, indicating that institutional investors’ allocation demand for XRP continues to grow.

Especially noteworthy is that even as XRP’s price faces recent pressure, the steady net inflow of ETFs persists, indicating that institutional capital’s fundamental judgment of XRP’s long-term value has not changed. This “buying the dip” pattern often suggests that prices may resume upward after a period of consolidation.

Regulatory clarity and real-world application deployment continue to strengthen the fundamentals

Market-driven factors analyzed in recent reports reveal deep changes happening within the XRP ecosystem. Ripple has received preliminary approval for an electronic money institution (EMI) license from the Luxembourg financial regulator, marking an important breakthrough in its compliant payment operations within the EU. Coupled with its previous FCA license in the UK, Ripple is establishing a dual regulatory framework, enabling it to more efficiently promote cross-border payments, stablecoin applications, and asset tokenization settlements in key European financial markets.

More groundbreaking is the on-chain application of real-world assets. Dubai has launched a government-backed real estate trading platform that allows investors to buy and trade real estate shares via blockchain, with XRP directly used as the core settlement tool. This is the first significant case where high-value real-world assets are tokenized, traded, and settled on-chain in a compliant manner. In this application, XRP is no longer just a trading asset but becomes a direct settlement medium for property share transactions.

These developments indicate that XRP is shifting from a speculative asset to a functional financial infrastructure, a transition often associated with long-term price appreciation potential.

Market sentiment warming may trigger a new upward wave

According to related news, analysts generally hold a bullish view on XRP’s medium- to long-term prospects. Market commentary suggests that XRP is increasingly seen as a potential foundational liquidity and settlement channel for a global financial system reset, rather than a speculative asset. Analyst Sam Daodu specifically pointed out that progress on the CLARITY Act and Ripple’s new trust bank approvals could catalyze increased institutional demand, with XRP prices possibly moving into the $8-10 range.

While these forecasts should be approached with caution, their underlying logic is supported by facts: increased regulatory certainty, expanding institutional allocations, and real-world application deployment. The combined effect of these factors could be fully priced in as market sentiment improves.

Summary

XRP has declined 1.39% in the past 24 hours, but this short-term correction should not be overinterpreted as a trend reversal signal. Instead, a close look at on-chain data, institutional fund flows, regulatory progress, and application deployment reveals that XRP’s fundamentals are continuously strengthening. Whale selling pressure is easing, retail and institutional investors are steadily entering, ETF funds are maintaining stable net inflows, regulatory frameworks are gradually improving, and real-world applications are emerging. These factors collectively lay the foundation for XRP’s medium- to long-term upward movement.

In the short term, the key support at $2.02 has held, and technical features show clear consolidation. The focus should now be on the performance of the $2.22-$2.39 range. In the medium to long term, market sentiment recovery and subsequent fund flow changes will determine whether XRP can restart its upward trajectory. The current decline may just be part of a high-level consolidation, not the beginning of a trend reversal.