XRP Faces Selling Pressure Despite Legal Victory

The cryptocurrency XRP finds itself in a paradoxical situation. While its issuer, Ripple Labs, recently secured a favorable court ruling, the digital asset's price has tumbled to a new annual low, driven by significant outflows from exchange-traded funds.

A key legal challenge against Ripple Labs was dismissed on January 29th by the US Court of Appeals for the Ninth Circuit. The court ruled that a class-action lawsuit, which alleged XRP was sold as an unregistered security, was barred by the statute of limitations. Judges concluded the three-year filing deadline had passed in 2016, as public sales of XRP commenced in 2013.

Market analysts note this case is separate from the well-known legal dispute with the Securities and Exchange Commission, which was settled in August 2025. Despite the removal of this additional legal overhang, the market reaction has been decidedly negative.

Spot ETFs See Historic Capital Flight

The primary source of downward pressure is institutional. U.S.-listed spot XRP ETFs experienced record single-day net outflows of $92.9 million on January 30th. This massive withdrawal erased all the inflows accumulated throughout the month up to that point.

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

The Grayscale GXRP fund was at the epicenter of the sell-off, with its redemptions overwhelming the minor inflows seen in competing products. This trend marks a stark reversal from late 2025, when these investment vehicles attracted hundreds of millions in new capital.

Whale Accumulation Contrasts with ETF Selling

On-chain data reveals a divergence in investor behavior. As ETF holders exit, direct holders appear to be buying. The number of "millionaire wallets"—addresses holding over one million XRP—increased in January for the first time in four months. This suggests long-term, large-scale investors are using the price weakness to accumulate, even as institutional money reduces exposure due to market volatility.

The selling pressure has pushed XRP to a 52-week low of $1.76. With a Relative Strength Index (RSI) reading of 28.8, the asset is now technically in oversold territory. Whether the buying from large holders can absorb the selling pressure from ETFs will be a key determinant of price action in the near term.