The honeymoon phase for XRP (XRP) ETFs just hit its first speed bump. After 36 consecutive days of investor money flowing in, Wednesday marked the first day that money actually left, with $40.8 million heading for the exits. That's not enormous in the grand scheme of things, about 3% of the $1.25 billion these funds have accumulated since Canary XRP ETF (XRPC) kicked things off on Nov. 13, 2025. But it's notable precisely because the streak was so clean until now.

Where Did the Money Go?

The 21Shares XRP ETF (TOXR) bore the brunt of it, with $47.25 million walking out the door. Meanwhile, funds from Canary, Bitwise, and Grayscale each saw modest inflows of around $2 million, which helped cushion the blow but couldn't fully offset the exodus from 21Shares.

Rachael Lucas, a crypto analyst at BTC Markets, thinks this looks like classic profit-taking behavior. XRP had just rallied from $1.80 to $2.40 in a single week, so some investors apparently decided to lock in gains. Add in a broader market pullback across crypto, and you've got the recipe for outflows.

But Lucas isn't ready to call this the end of the rally. She pointed to on-chain indicators showing exchange reserves at historically low levels and transaction volumes running hot, both signs that underlying demand remains strong. If the inflows pick back up, XRP could make another run at the $3 level.

Bitcoin and Ethereum ETFs Feel the Pain Too

XRP wasn't alone in the selloff. Bitcoin (BTC) and Ethereum (ETH) ETFs also got hammered Wednesday. Bitcoin ETFs reported a combined net outflow of $486 million, with Fidelity Wise Origin Bitcoin Fund (FBTC) losing $247.6 million and BlackRock's IBIT (IBIT) shedding $130 million.

Ethereum ETFs weren't spared either, seeing $98.5 million in net outflows, with $52 million exiting Grayscale's ETHE. This marks the first outflow day for ETH ETFs in 2026 after they pulled in $457 million during the first three trading days of the year.

Lucas characterized the broader outflows as typical post-rally rebalancing and leverage unwinds following Bitcoin's surge to $94,000. When prices run up fast, traders who borrowed to amplify their bets often need to sell to reduce risk.

Min Jung, a research associate at Presto Research, offered another angle: crypto has been underperforming relative to other asset classes lately. Investors seem more comfortable parking money in stocks than in digital assets right now, which helps explain why funds are flowing out across the board.

The Technical Picture Looks Rough

XRP is down over 3% on the day, and the chart isn't telling a happy story. The crypto broke below critical support at the 20-day exponential moving average of $2.03, erasing the previous week's gains in the process.

After rallying 22% from the December low of $1.77 to $2.16 by Jan. 5, XRP gave back those gains in just three sessions. That's the kind of rapid reversal that makes traders nervous.

The breakdown below the 20 EMA marks the first failure to hold this level since the December recovery began. XRP made an attempt to break through resistance at $2.45-$2.50 but failed, triggering aggressive selling. Now the price is caught between the 20 EMA at $2.03 and the 50 EMA support at $2.07.

The Supertrend indicator flipped to bearish at $1.96, sitting just below current price as the next major support level. Overall, XRP dropped 15% from the Jan. 5 high in just two days, negating much of December's recovery effort.

Upside targets: XRP needs to reclaim $2.07 (the 50 EMA) to stabilize. Beyond that, watch for resistance at $2.16, then $2.22 (the 100 EMA). Clearing $2.34 (the 200 EMA) would restore the bullish structure and suggest the rally might have legs after all.

Downside risks: Support sits at $2.02 (the 20 EMA), then $1.96 (the Supertrend level). Breaking below $1.95 targets the December low of $1.77, with a potential extension down to $1.60 if selling really accelerates.

So is the rally over? Hard to say definitively. The outflows and technical breakdown are concerning, but they're happening against a backdrop of broader crypto weakness rather than anything XRP-specific. If market sentiment shifts and money starts flowing back into risk assets, XRP could recover quickly. For now though, the momentum has clearly shifted to the bears.