XRP Faces Critical Test as Institutional Support Wanes

A key pillar of recent support for XRP has shown its first sign of weakness in nearly three months. For the week ending January 25, U.S. spot ETFs dedicated to the asset recorded net outflows, snapping a ten-week streak of consistent capital inflows. The withdrawals totaled approximately $40.64 million, applying noticeable downward pressure on the cryptocurrency's price. This shift coincides with a precarious technical position and mounting political headwinds in Washington.

From a chart perspective, XRP is trading at a decisive juncture. The digital asset is currently priced around $1.92, battling to stabilize above a key support level at $1.88. This zone was tested and held multiple times over the past weekend. Analysts note that a sustained break below this support could open the door to lower price levels. Conversely, a recovery would require reclaiming the psychologically significant $2.00 threshold.

Compounding the pressure from ETF flows is the stalled progress of financial legislation in the United States. Market observers point specifically to the "Market Structure Bill," which has seen delayed advancement in the U.S. Senate. Its passage is viewed as a potential catalyst for providing long-term regulatory clarity for XRP. Furthermore, broader geopolitical tensions, including threatened U.S. tariffs, are creating market-wide uncertainty. This environment is prompting capital rotations into traditional safe-haven assets, temporarily disadvantaging risk-sensitive investments like cryptocurrencies.

Should investors sell immediately? Or is it worth buying XRP?

A Pause in Institutional Demand

The primary driver behind this week's market sentiment has been a sudden shift in institutional behavior. The series of ten consecutive weekly inflows into U.S. spot ETFs came to an abrupt halt. Significant redemptions on Tuesday acted as the main trigger, aligning with a broader phase of risk aversion across financial markets.

However, a nuanced view of the data offers a glimmer of optimism. Metrics indicate that by the middle of the week, modest inflows had resumed. This pattern suggests that institutional interest has not evaporated entirely but may be pausing amid a current market consolidation phase. Despite Ripple's continued fundamental expansion of its payment network, short-term speculative outflows are currently dominating price action.

The interruption of the ETF inflow streak undoubtedly presents a near-term obstacle. The immediate direction for XRP will likely hinge on the buyers' ability to defend the $1.88 support level and whether forthcoming political signals from U.S. lawmakers can inject fresh, positive momentum into the market.