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XRP after reaching a high of $2.357 on January 6th, entered a seven-day continuous decline, the longest such cycle since November 2025. Technical analysis issues a warning: if the price cannot hold the key support, it may face a deep correction of up to 40%.

As of January 20th, according to Gate’s latest market data, XRP is priced at $1.999, down 2.91% in 24 hours. Market sentiment swings between fear and greed, and investors are eager to know: Is this decline the end of the trend, or a healthy correction within a long-term bull market?

01 Market Pulse

According to Gate market data, XRP showed weakness in trading on January 20th, briefly breaking below the key psychological level of $2 dollars, and finally closing at $1.999. This price level has fallen more than 15% from the recent high of $2.357 reached on January 6th.

Reviewing the past seven days, XRP experienced the longest continuous decline cycle since November 2025, with prices sliding from the high, and market sentiment turning notably cautious.

From a broader macro perspective, XRP’s average monthly price in January 2026 is about $2.01, a rebound from December 2025’s $1.86, but still far from the high of $3.02 in July 2025. This price volatility highlights XRP’s characteristic as a “policy-sensitive asset.”

02 Causes of Price Fluctuations

XRP’s current decline results from multiple factors, including macro market pressures and its unique regulatory uncertainties.

The recent delay in the U.S. Market Structure Act review is a direct trigger for the price pressure. On January 12th, the U.S. Senate Agriculture Committee announced a postponement of the bill review originally scheduled for January 15th.

Political negotiations have extended the legislative process. According to cryptocurrency program host Eleanor Terrett: “March is the absolute earliest. If the House decides to amend the bill submitted by the Senate, it might even be until summer.”

This time uncertainty causes anxiety among investors regarding XRP’s short-term prospects, with some funds choosing to temporarily exit and observe.

From a technical analysis standpoint, XRP’s price has broken below the key 50-day and 200-day moving averages, which had previously been viewed as important dynamic support levels.

When prices break these technical indicators, it often triggers algorithmic trading and stop-loss orders, intensifying selling pressure. The current $2 dollar level is not only a psychological support but also a critical technical point of contention between bulls and bears.

03 Technical Analysis and Risk Warning

Technical analysis indicates XRP may face further downside risk. According to TradingView analysis, XRP has formed a bearish technical pattern.

The price has been rejected around $2.56 for the third time by the 200-day exponential moving average, showing strong resistance above.

The current price trend has broken below the support of the 50-day exponential moving average near $2.07, indicating increasing downward momentum. Analysts suggest that if the $2 dollar key psychological support level is lost, XRP could test several key support zones:

First at $1.90, the low point of November 2025; second at $1.80, the low of December 2025; and deeper support at $1.61, the lowest point in April 2025.

Some more pessimistic analyses even suggest XRP could face a decline of up to 40%, potentially testing the support at $1.25. This level was the low reached during the October 2025 flash crash, and if it occurs, it would represent a roughly 40% drop from current prices.

XRP Key Price Levels and Recent Changes

04 Market Sentiment and Institutional Views

Despite the short-term technical weakness, market opinions on XRP’s long-term prospects remain divided. Some institutional investors remain optimistic, believing XRP could reach $8 in the long run.

Gate’s XRP price forecast shows that although the average price in 2026 is expected to be around $1.93, by 2031, the price could rise to $4.68, with a potential return of up to 75%.

This long-term optimism is mainly based on two factors: the final passage of the Market Structure Act, which would provide XRP with a clear regulatory framework, and the potential approval of XRP spot ETFs, which could attract more institutional funds.

Meanwhile, changes in the U.S. macroeconomic environment could also turn the tide for XRP. The Consumer Price Index (CPI) in December 2025 remained stable at 2.7%, providing room for the Federal Reserve to maintain a dovish rate path.

An improved interest rate environment generally benefits risk assets, including cryptocurrencies. Historical data shows that when market expectations for rate cuts increase, XRP often gains upward momentum.

05 Rational View of Market Fluctuations

For investors focusing on XRP, understanding the logic behind current market volatility is crucial. XRP’s price performance is closely linked to its regulatory progress, which brings both risks and opportunities.

The progress of the Market Structure Act will be a key variable influencing XRP’s short-term trend. Once the bill is passed in the Senate, XRP could react swiftly and regain upward momentum.

From an investment perspective, price corrections may offer better entry points for long-term investors. Gate’s research indicates that XRP’s fundamentals—including increased utility, faster transaction speeds, and energy efficiency—remain solid in the long run.

For those considering deploying capital at current levels, a phased accumulation strategy is recommended, with close attention to the $2 dollar support levels and the bulls-bears contest.

Setting reasonable stop-loss levels (such as $1.90 or $1.80) can help manage downside risks, while long-term targets can be set in the $3.00 to $3.66 range.

Future Outlook

Gate market data shows XRP tested the $2 dollar level again on January 20th. The text of the Market Structure Act has been released in the Senate, and the bipartisan 278-page draft provides a clear path for cryptocurrency regulation.

This draft specifically states that mainstream cryptocurrencies like XRP, if used as major ETF assets, will receive the same regulatory treatment as Bitcoin and Ethereum, without the need for additional disclosures.