XRP is exhibiting on-chain and technical patterns that mirror the conditions preceding its 68% collapse in 2022, raising fresh downside risk for traders and treasuries. Analysis flags an asymmetric profit structure while spot XRP ETFs recorded net outflows of $53.32 million in January 2026, amplifying sell-side pressure.
Data from on-chain analysis show newer buyers accumulating below the cost basis of longer-term holders — a dynamic that previously left early holders under sustained psychological pressure. That profit asymmetry meant modest rebounds were met with heavy selling from investors seeking to break even; the same structure is visible in January 2026 data, according to data.
‘This profit asymmetry presents significant challenges for XRP’s price stability,’ said recent analysis, noting the similarity to the lead-up to the 2022 decline.
Technical setup and market flows
Technically, XRP is trading inside a descending triangle, a formation that historically biases moves lower when coupled with deteriorating momentum. Comparative MACD histogram structures from the 2025–2026 run and the 2021–2022 cycle show analogous momentum erosion, increasing the odds of a pronounced downside break if key supports fail.
Institutional flows add a concrete supply-side headwind: spot XRP ETFs posted their largest net outflows since launch, totaling $53.32 million in January 2026. That withdrawal of institutional demand compounds selling pressure when on-chain holder mix is skewed toward recent buyers holding gains while long-term holders sit underwater.
For market participants, the interaction between technical support at the $2 area and on-chain holder structure is the operational risk. A decisive breach would likely trigger algorithmic selling and forced exits from leveraged positions, while a failed breakout would probably discourage fresh long allocations from institutional desks.
Investors are now turning their attention to the $2 support band and the next ETF flow updates, which will serve as the ultimate test for whether the current setup resolves as a benign correction or a deeper, multi-month sell-off. Risk managers should monitor realized-loss bands, exchange flows and open interest in perpetuals for early signs of capitulation or stabilisation.
