XRP drops 5.77% intraday, but why are institutions still increasing their holdings?

XRP experienced a 5.77% correction in the past 24 hours, currently trading at $2.13, with its market capitalization decreasing by $7.904 billion to $129.142 billion. Interestingly, this decline has not shaken institutional investors’ confidence—although the XRP spot ETF recorded outflows in a single day, the net inflow remains high. This reflects a typical market dynamic where short-term profit-taking coexists with long-term optimism about the fundamentals.

Short-term Adjustment: A Normal Profit-Taking Correction

As of press time, XRP’s trading range over the past 24 hours was $1.87 to $2.41, with a trading volume of $4.067 billion. According to the latest news, the XRP spot ETF recorded a total net outflow of $40.8 million on January 7, with 21Shares’ TOXR product experiencing an outflow of $47.25 million, the most sluggish among them.

This short-term correction is not surprising. Looking at the price trend, XRP has risen 15.46% over the past 7 days, and such rapid growth naturally attracts short-term profit-taking. However, it is worth noting that the Bitwise XRP ETF still recorded a net inflow of $2.44 million, reflecting divergence among fund managers—some are bottom-fishing, others are taking profits.

Medium-term Trend Intact: Support Behind the 15.46% 7-day Rise

Although today’s decline, XRP’s medium-term upward trend remains clear. It has increased 15.46% over the past 7 days and 3.98% over the past 30 days, indicating from a weekly perspective that XRP is still in an upward cycle. The 5.77% short-term correction is just a normal technical adjustment within this broader context.

More importantly, the cumulative net inflow into XRP spot ETFs has reached $1.2 billion, reflecting institutional recognition of XRP’s long-term value. The single-day outflows are more about position adjustments rather than a fundamental rejection of XRP by institutions.

Strong Fundamental Support: Ecosystem and Regulatory Progress Hand in Hand

While prices fluctuate in the short term, the fundamental story is accelerating. According to the latest news, Flare’s FXRP, issued through its FAssets system, has officially launched on the Hyperliquid platform, providing XRP holders with deeper on-chain spot liquidity and expanding XRP’s use cases in DeFi scenarios. This indicates ongoing expansion of XRP’s ecosystem applications.

Even more significant is Ripple’s development progress. The company completed a $500 million funding round in November 2025, with a valuation of approximately $40 billion, attracting heavyweight institutions such as Fortress Investment Group, Citadel Securities, and Pantera Capital. Meanwhile, Ripple’s application for a national banking license has received conditional approval to establish Ripple National Trust Bank, which will directly connect it to the US financial system. Additionally, Ripple acquired Solvexia, further strengthening its financial management capabilities.

All these actions point in the same direction: Ripple is building a comprehensive financial infrastructure ecosystem, with XRP as its core asset, supported by strong long-term fundamentals.

Key Highlights

Summary

Today’s 5.77% decline in XRP is essentially a normal correction resulting from short-term profit-taking within a medium-term upward trend. From a broader perspective, Ripple’s progress in funding, ecosystem expansion, and regulatory recognition provides solid fundamental support for XRP. The ongoing institutional allocations also validate market confidence in these developments. Short-term volatility is inevitable, but the medium- and long-term story continues to unfold.