XRP Surges Past $2.40 Amid Record ETF Inflows and Supply Squeeze

XRP staged a powerful rally on Monday, advancing by 11% to approach the $2.40 level. This breakout represents the asset's most significant price movement in weeks, fueled by substantial capital moving into spot ETFs that launched just last November. Concurrent on-chain metrics reveal a pronounced tightening of available supply on exchanges.

A fundamental shift in the regulatory landscape is providing significant tailwinds. The departure of SEC Commissioner Caroline Crenshaw and anticipated crypto market structure legislation expected in January are fostering a more constructive environment. For XRP, which endured years of legal uncertainty due to the SEC's case against Ripple, this evolving backdrop is pivotal. The resolution of these legal overhangs has been instrumental in paving the way for institutional investment products, enabling the large-scale capital inflows now being observed.

Unprecedented ETF Demand

The data for US-listed XRP ETFs reveals record-setting institutional interest. On January 5 alone, inflows hit $48 million—a new single-day record for several products since their debut. Cumulative inflows have now surpassed the $1 billion milestone since trading began on November 13, 2025. This achievement makes XRP the second-fastest cryptocurrency, behind only Bitcoin, to reach this threshold.

Key ETF metrics include:
* 43 consecutive trading days of positive inflows before the first neutral day
* Zero days of net outflows since launch
* December 2025 inflows totaling $483 million
* Major providers like Canary Capital, Grayscale, Bitwise, and Franklin Templeton participating

A notable divergence occurred in December: while XRP ETFs attracted nearly half a billion dollars, Bitcoin ETFs saw outflows of $1.09 billion and Ethereum ETFs experienced $564 million in withdrawals. This institutional preference for XRP emerged during a month where its price actually declined by 15%, falling from $2.35 to $1.77.

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

Exchange Supply Hits Critical Low

On-chain analysis paints a clear picture of tightening supply. The quantity of XRP held on exchanges has plummeted by approximately 45% in 2025, dropping from 3.95 billion to 2.6 billion tokens. This structural scarcity means that even moderate buying pressure can trigger disproportionate price movements.

The ETFs themselves currently hold roughly 746 million XRP, equivalent to 1.14% of the circulating supply of 65.5 billion tokens. When combined with the declining exchange balances, the resulting supply dynamic is one that may not yet be fully reflected in the current market price.

Technical Outlook and Key Levels

From a chart perspective, the crucial technical signal was the break above the resistance zone between $2.28 and $2.32. Sustained trading above this range would confirm the bullish momentum. On the downside, the $1.85 level represents major support; a break below it would invalidate the current bullish thesis.

The coming weeks will be critical for assessing whether ETF inflows can maintain their current pace. Monthly inflows exceeding $300 million indicate robust institutional demand. Should this figure drop significantly, it could signal that near-term demand is becoming saturated.