XRP (XRP) is attempting to reclaim $2 as technical indicators turn constructive, exchange supply tightens and spot XRP ETFs record fresh inflows.

Supply Squeeze Beneath the Surface

While XRP's price action hasn't exactly set the world on fire lately, something interesting is happening behind the scenes. Trader Web3Niels pointed out that exchange balances have fallen sharply from about 3.76 billion XRP in October to roughly 1.6 billion today, pushing available supply to seven-year lows.

This reduction reflects liquidity being pulled from exchanges, which makes the asset more sensitive to any pickup in demand. When there's less supply sitting on exchanges waiting to be sold, it doesn't take as much buying pressure to move the price.

Technical Signals Turn Constructive

Crypto chart analyst Ali Martinez highlighted that the TD Sequential has printed a macro buy signal on XRP, a pattern that often signals downside exhaustion and raises the probability of a near-term rebound.

Degen Hardy said XRP appears "washed out, not broken." While the asset has trended lower since July, it continues to hold the broader range it has respected since 2024. Prolonged downside pressure without a range breakdown typically points to exhaustion rather than further decline, making current levels a potential long-term accumulation zone.

ETF Inflows and Ripple Activity

Whale Alert data showed Ripple unlocked 1 billion XRP from escrow in multiple tranches, part of the company's regular schedule.

Meanwhile, SoSoValue data indicated spot XRP ETFs recorded $5.58 million in net inflows on December 31, contrasting with net outflows from Bitcoin and Ethereum spot ETFs.

Ripple senior executive officer Reece Merrick wished the community a happy New Year on X, thanked supporters for 2025 and said he is "excited" about potential wins heading into 2026.