XRP price is already off to a strong start in January, considering its performance in the first seven days of the month. But is the rally over just as quickly as it began, or will the Ripple coin extend its recovery?
XRP price rallied by as much as 31% from its $1.84 weekly opening price on 1 January to its latest local high at $2.41 on Tuesday. However, the cryptocurrency has since retraced to the $2.2 price range.
The XRP price retracement over the last two days was not surprising, given that the cryptocurrency was oversold following the recent uptick. However, it was still heavily discounted compared to its 2025 peaks.
While the Ripple coin retreat in overbought territory was a normal observation when the price is overheated. However, it may also set the pace for the cryptocurrency’s next move as the market determines whether the rally was a solid foundation for more recovery.
The Ripple coin just experienced its biggest liquidation event in the last 4 weeks. CoinGlass data revealed that XRP had over $22 million in long liquidations on Tuesday. It marks the highest daily long liquidation figure observed since late November.
Interestingly, the asset also recorded $24 million worth of short liquidations on Monday, a day prior. These two days marked the first major liquidation events of 2026.
The liquidations also highlighted the rising level of volatility in the market. A CryptoQuant analysis highlighted that most of the liquidations occurred on Binance.
The liquidation event this week mirrors the kind of environment observed before the markets crashed in the second half of 2025. This suggests that XRP attracted heavy derivatives activity with the onset of the 2026 season.
Unsurprisingly, the latest crypto market data revealed a spike in XRP open interest from $3.3 billion on 1 January to $4.55 billion as of 6 January. While this confirmed a strong uptick in the derivatives segment, things were different in the spot segment.
XRP spot flows remained negative in the first week of 2026 despite the bullish price action. In fact, spot flows signaled a surge in sell pressure. This could signal that smart money has been using the recent demand as exit liquidity.
The latest XRP price action, combined with negative spot flows, casts short-term doubts. However, Wall Street may be eying the Ripple coin.
A recent CNBC analysis highlighted why this is the case.
There were three major reasons why XRP price could be destined for robust moves this year. The first was that the legal hurdles that previously held back XRP no longer exist.
The analysis also noted that Ripple coin was far less crowded by investors than Bitcoin and Ethereum, hence highlighting more sensitivity to demand. This also means it may have an easier time rallying compared to its counterparts.
The fact that Ripple has also been positioning itself as a key infrastructure for cross-border payments and the future of banking may also boost its appeal.
However, some analysts still believe that Ripple’s adoption in the banking and global remittance segments may not be there yet.
Nevertheless, XRP price may still benefit based on recent positioning. For context, XRP ETFs maintained overall positive flows, signaling that institutional investors are building their positions.
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