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Recent Market Developments in XRP ETFs

On Wednesday, XRP ETFs in the United States witnessed their first net outflows after an impressive 36-day inflow streak. A total of $40.8 million exited the sector, primarily due to $47.25 million flowing out from the notable 21Shares XRP ETF (CBOE: TOXR).

First Red Day Since November Launch

This shift marks a significant change in sentiment, particularly after XRP ETFs had accumulated total net inflows amounting to $1.25 billion since the launch of the Canary XRP ETF (NASDAQ:XRPC) on November 13, 2025. The recent outflow of $40.8 million represents roughly 3% of the cumulative inflows that had built up since the ETF’s inception.

The movement of funds indicates a trend where the 21Shares TOXR experienced a substantial $47.25 million outflow. In contrast, the other ETFs, such as those operated by Canary, Bitwise, and Grayscale, saw relatively nominal inflows of about $2 million each, helping to partially mitigate the broader exodus.

According to Rachael Lucas, a crypto analyst at BTC Markets, the outflows appear to be a result of profit-taking. She notes that XRP saw a rapid increase in price from $1.80 to $2.40 within just a week, alongside a general market pullback. Despite the cooling off, on-chain indicators suggest that XRP retains underlying strength, with historically low exchange reserves and heightened transaction volumes. Should inflows recommence, there exists the potential for XRP to test the $3 mark again.

Bitcoin and Ethereum ETFs Also Experience Outflows

In parallel with XRP, both spot Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) ETFs also recorded significant net outflows on the same day. Bitcoin ETFs documented a total net outflow of $486 million. In particular, the Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC) faced a staggering $247.6 million outflow, while BlackRock’s IBIT (NASDAQ: IBIT) lost $130 million.

Meanwhile, Ethereum ETFs saw a cumulative outflow of $98.5 million, led by $52 million exiting Grayscale’s ETHE. This marked the first day of net outflows for ETH ETFs in 2026, after witnessing an impressive $457 million in inflows during the initial trading days of the year.

Lucas highlighted that these outflows are typical post-rally rebalancing behaviors, especially following Bitcoin’s swift surge to $94,000. Min Jung, a Research Associate at Presto Research, observed that cryptocurrencies have been lagging relative to other asset classes, prompting investors to seek more stable positions in stocks rather than in the highly volatile crypto sector.

XRP Technical Breakdown Shows Signs of a Failed Rally

XRP’s current performance is troubling, as it has declined by over 3% today, effectively negating the gains from the previous week and breaking below a significant support level at the 20 EMA of $2.03. Following a 22% rally from a December low of $1.77 to $2.16 by January 5, XRP has lost those gains shockingly fast.

The breakdown below the 20 EMA signifies a critical failure to maintain this support level, the first of its kind since the December recovery began. Furthermore, the recent failed breakout attempt at the $2.45-$2.50 range has sparked aggressive selling, resulting in XRP being tightly bound between the 20 EMA at $2.03 and the 50 EMA support at $2.07.

The Supertrend indicator has turned bearish at $1.96, located just beneath the current market price, which now serves as the next major support level. Over the last two days, XRP has plummeted 15% from its January 5 high, negating much of its efforts for recovery in December.

Upside and Downside Targets

• Upside Targets: XRP must reclaim the $2.07 level (50 EMA) to gain any stabilization. Following this, previous resistance at $2.16, then $2.22 (100 EMA) will be significant. A successful breakout beyond $2.34 (200 EMA) would suggest a return to a bullish trend.

• Downside Risks: Support levels exist at $2.02 (20 EMA), followed by $1.96 (Supertrend). A breakdown below $1.95 could target $1.77, reaching the December low with the prospect of further extension towards $1.60.

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