XRP Leads Market Rally with 12% Surge: What’s Driving the Spike?

XRP has seen an impressive 12% rise to reach $2.42 on January 6, marking its peak price since mid-November 2025, before settling around $2.35.

Key Takeaways

XRP's price surged by 12% to $2.42 due to significant ETF inflows and technical indicators.
On January 5 and 6, XRP ETFs saw a total of $48 million in net inflows, the highest since they launched in November 2024.
Over the past two months, ETF inflows reached approximately $1.23 billion, signaling increased institutional interest.
A technical breakout has occurred, with over $250 million in short positions liquidated during the price peak.
Institutional support for XRP is growing, with predictions from major banks suggesting prices could reach $8 by the end of 2026.

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This surge in XRP's price is fueled by significant financial inflows into XRP-focused exchange-traded funds (ETFs), favorable technical patterns, and a noteworthy decrease in short positions. These factors have contributed to one of the most remarkable rallies observed during the crypto market's early 2026 recovery phase.

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XRP ETF Inflows and Institutional Interest Fuel Gains

On January 5 and 6, XRP-focused ETFs saw $48 million in net inflows, marking notable growth since their introduction in November 2024. Over the past eight weeks, these ETFs have accumulated around $1.23 billion, which shows an increasing demand for XRP from institutional investors. The rising influx of funds is helping to absorb selling pressure and limiting the supply of XRP on exchanges.

Vincent Liu, Chief Investment Officer at Kronos Research, pointed out that the combination of ETF inflows and XRP surpassing critical resistance levels on strong trading volume has heightened the risk appetite among traders. This interest is bolstered by regulatory clarity following Ripple's settlement with the U.S. Securities and Exchange Commission (SEC) in 2025, which removed considerable barriers to broader adoption.

Technical Breakout and Short Squeeze Accelerate Price Movement

Technical analysts observed that XRP broke out from a falling wedge pattern and is maintaining levels above the 50-day moving average, a sign of positive momentum for traders. During this price uptick, more than $250 million in short positions were liquidated within just an hour, further propelling the rally as short sellers were forced to cover their positions.

John Bollinger, a prominent trader and the creator of the Bollinger Bands, noted that XRP is following a similar bullish trend as Bitcoin and Ethereum, although with slightly weaker momentum. He speculated that XRP's price might align with Bitcoin's upward trajectory, with price targets potentially reaching near $3.50 if the current support levels remain solid.

XRP's rally is occurring during a general recovery in the crypto market, with Bitcoin and Ethereum having increased by 7.4% and 9.3%, respectively, over the past week. Additionally, on-chain data suggests a decline in XRP balances on centralized exchanges, indicating a decrease in selling pressure.

Support from institutional investors is on the rise, with PwC recognizing Ripple as a key player in blockchain-based financial services. Major banks like Standard Chartered have projected XRP's price could hit as high as $8 by the end of 2026, considering Ripple's growing role in cross-border payments and settlement solutions.

As market sentiment improves and regulatory uncertainties diminish, XRP seems well-positioned to capitalize on both technical momentum and a surge in institutional demand. Traders are eagerly watching to see if XRP can maintain gains above crucial resistance levels around $2.30 and possibly advance towards higher price targets.

The cover image is from ChatGPT, and the XRPUSD chart is sourced from Tradingview.