XRP has entered a correction phase, dropping over 15% from its year-to-date high, but technical indicators suggest a potential bullish reversal. Spot XRP exchange-traded funds saw inflows jump 47% last week, adding $56 million in assets. Ripple's recent regulatory approvals in Europe and the US bolster the token's outlook amid growing institutional interest.
XRP's price has corrected sharply, falling more than 15% from its 2026 year-to-date high of $2.4165 on January 6 to around $2.05 as of January 18. This retreat pushed the token below key technical levels, including the 50% Fibonacci retracement, the 50-day and 100-day exponential moving averages, and the Supertrend indicator, signaling a bearish short-term trend. Despite this, the four-hour chart reveals a double-bottom pattern forming at $2.04, with a neckline at $2.188—a setup that typically precedes a bullish reversal.
The token's market capitalization has dipped to $125 billion. However, positive developments are emerging. Spot XRP ETFs recorded inflows of $56 million last week, a 47% increase from the prior week's $38 million. This week, inflows reached $108 million, bringing total assets under management to $1.52 billion—equivalent to 1.2% of XRP's market cap. For comparison, Bitcoin and Ethereum ETFs hold 6.5% and 5.4% of their respective market caps, indicating room for XRP funds to grow.
Ripple Labs has advanced its regulatory standing, securing licenses from the United Kingdom and Luxembourg less than a month after obtaining a banking charter from the US Office of the Comptroller of the Currency. These approvals will facilitate partnerships with more European firms.
Further boosting demand, Evernorth is set to go public through a SPAC merger. The company, which has already amassed millions of XRP tokens, plans to generate yield via regulated DeFi strategies, including validator participation on the XRP Ledger. Meanwhile, investors are shifting XRP to Flare's FXRP, which now boasts over $150 million in DeFi total value locked.
Analysts remain cautiously optimistic: as long as XRP holds above the double-bottom support at $2.03, the outlook stays bullish. A break below could lead to further downside toward $1.9127 at the 78.6% Fibonacci level.
In a related note, XRPL developer Bird, known for the DROP meme coin, commented that holding more value in XRP than cash demonstrates savvy amid inflation concerns, sparking discussions on smart asset allocation.
