Institutional Accumulation of XRP Defies Retail Sell-Off

The cryptocurrency XRP is trading within a narrow band around $1.83 this Friday. This price action follows a weak fourth quarter that saw losses of approximately 35%. A striking divergence is emerging, however: as the price declines, institutional investors are increasing their exposure. This contradiction forces market participants to consider which group has the correct outlook.

Two key macroeconomic events are influencing trading activity today. First, inflation data from Japan has applied slight pressure to the Yen. Core inflation in Tokyo cooled to 2.3% in December, down from 2.8% the previous month. While this remains above the Bank of Japan's 2% target, the dynamic could encourage additional Yen carry trades, where investors borrow in the low-yielding currency to fund investments in higher-risk assets like cryptocurrencies.

Secondly, options contracts with a notional value of roughly $27 billion are set to expire today, including significant XRP derivatives. This wave of expirations is suppressing volatility and effectively trapping XRP within its current trading range.

Regulatory Clarity Fuels Professional Investor Confidence

Despite the downward price trend, a notable pattern is evident. U.S.-listed spot ETFs for XRP continue to record net inflows. Their collective assets under management have now surpassed the $1.25 billion threshold, a milestone achieved against a backdrop of falling prices. This suggests professional money managers are using the period of weakness to establish or add to positions.

This institutional confidence is bolstered by a clearer regulatory landscape for Ripple. The SEC lawsuit is effectively concluded, and the company's provisional approval for a bank charter from the OCC grants it enhanced credibility within the traditional finance sector.

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

Retail Participation Evaporates On-Chain

Blockchain data presents a contrasting picture. Activity on the XRP Ledger shows the number of active addresses has fallen to a monthly level of just 34,005, signaling a pronounced drop in network engagement. Many short-term holders have liquidated their positions at a loss, and larger wallets have also been reducing their balances.

These on-chain metrics reflect a clear capitulation among retail investors. Those who may have anticipated quick profits in recent weeks now appear to be exiting the market.

Technical Outlook Points to Continued Pressure

XRP is currently oscillating between $1.80 and $1.88. The support level at $1.80 is viewed as critical; a decisive break below it could pave the way for a move toward $1.75. On the upside, the token must first reclaim the $1.88 level before the psychologically significant $2.00 threshold becomes a realistic target.

The asset is trading below its key moving averages, a technical configuration that typically suggests further near-term weakness. Nevertheless, the growing disparity between steady institutional inflows and a soft price could set the stage for a unexpected shift as the year progresses.