Core Insights - XRP's price has fallen below $2, erasing nearly all recovery since the start of the year, with increased balances on major exchanges raising concerns about further downside risk [1] - Despite current market weakness, many analysts remain optimistic about XRP's potential in 2026 [1] Exchange Reserves and Whale Activity - XRP reserves on major exchanges like Binance and Upbit saw significant increases in January 2026, with Binance holding 2.72 billion XRP and Upbit nearly 6.3 billion XRP, accounting for almost 10% of the circulating supply [2][3] - An inverse correlation between Upbit balances and XRP price has emerged, with XRP dropping from $2.40 to $1.83 as Upbit reserves rose [4] - Increased whale transactions on exchanges indicate that large holders are actively moving XRP, which could intensify selling pressure [5][6] ETF Performance and Market Sentiment - XRP ETFs experienced only two days of outflows since their November 2025 launch, with significant withdrawals of $40.80 million on January 7 and $53.32 million on January 20, driven by geopolitical tensions [7] - A recent analysis suggests that negative capital inflows may signal a pause in institutional demand, with XRP trading near the critical support level of $1.88, where a breakdown could lead to a further 45% decline [8] - Positive factors include improved XRP ETF trading volumes and rising demand for DeFi products on the XRP Ledger, which may help absorb selling pressure [9]