XRP Surges 12% to $2.42 on ETF Inflows & Technical Breakout

The primary engine behind XRP’s surge was a massive influx of capital into XRP-focused exchange-traded funds (ETFs). Spot XRP ETFs recorded a substantial $48 million in net inflows on January 5 and 6 alone, representing the largest daily inflows since their launch in November 2024. This institutional appetite is not a fleeting trend; over the past eight weeks, these funds have seen consistent inflows totaling approximately $1.23 billion. Vincent Liu, Chief Investment Officer at Kronos Research, highlighted that this ETF-driven buying pressure is crucial for absorbing selling pressure and reducing the available supply of XRP on exchanges.

This growing institutional confidence is firmly rooted in the regulatory clarity achieved in 2025 following Ripple’s settlement with the U.S. Securities and Exchange Commission (SEC). The resolution of this long-standing legal dispute removed a major adoption obstacle, paving the way for traditional finance to engage with the asset more freely. The sentiment is further bolstered by endorsements from major firms like PwC, which has recognized Ripple as a core player in blockchain-based financial services, validating its underlying technology and business model.

Concurrent with the fundamental inflows, XRP executed a decisive technical breakout. Analysts identified a bullish pattern, breaking free from a falling wedge formation while maintaining price levels above its 50-day moving average—a key indicator watched by momentum traders. This technical strength triggered a cascade in the derivatives market. During the peak of the price surge, over $250 million in short positions were liquidated within a single hour, creating a powerful short squeeze.

This forced covering by bearish traders added significant fuel to the rally, accelerating the upward price movement. Renowned trader John Bollinger, inventor of the Bollinger Bands technical indicator, observed that XRP is following a similar bullish pattern to market leaders Bitcoin and Ethereum, albeit with slightly weaker momentum. He suggested that XRP’s price trajectory could continue to track Bitcoin’s upward trend, with analysts projecting a near-term target near $3.50 if current support levels hold firm.

XRP’s rally did not occur in isolation; it is part of a broader cryptocurrency market recovery. Over the past week, Bitcoin and Ethereum posted gains of 7.4% and 9.3%, respectively, indicating improving overall market sentiment. On-chain data for XRP specifically shows a decline in its balances on centralized exchanges, suggesting that holders are moving assets into custody, which reduces immediate selling pressure and points to longer-term confidence.

Looking ahead, institutional projections for XRP have turned notably bullish. Major financial institutions are citing Ripple’s expanding role in cross-border payments and settlement solutions as a fundamental driver for future value. Notably, banks such as Standard Chartered have published projections suggesting XRP could reach prices as high as $8 by the end of 2026. As market sentiment continues to improve and regulatory uncertainties ease, XRP appears strategically positioned to benefit from both sustained technical momentum and deepening institutional demand. Traders and investors are now closely watching to see if the cryptocurrency can maintain its gains above key resistance zones around $2.30 and build momentum toward these higher price targets.