Can XRP Price Repeat Its 2025 Rally? Hidden Demand Threatens Bears

Key Insights:

• XRP price is holding near $1.80–$2.00 support, with negative funding rates and crowded shorts suggesting latent buying pressure.
• Extreme retail fear and steady ETF inflows point to hidden demand despite recent price weakness.
• Long-term XRP price prediction through 2026 ranges from $2.50–$3.00 in a base case to $8+ under bullish institutional adoption and regulatory clarity.

The XRP price has pulled back into the low-$2 range after a spectacular rally in 2025. However, bearish sentiment may be masking fresh buying pressure. In late January 2026, XRP dipped below $2, roughly a 19% decline from its January 5 peak. Yet, on-chain indicators suggest bears could be in for a surprise.

Notably, perpetual-futures funding rates have flipped sharply negative. It is a classic warning that short sellers may be getting squeezed.

CryptoQuant notes that this exact pattern, negative funding in futures, occurred during August–September 2024 and again in April 2025. Each time it preceded a strong XRP rebound.

In other words, a surge in leveraged short positions may be storing up “latent buying pressure” for the next upswing.

At the same time, social-media sentiment has swung into “extreme fear,” historically a contrarian buy signal. Taken together, these signals raise the question: Can XRP price repeat its 2025 rally, or will bulls’ hopes fizzle?

Negative Funding Rates Signal Hidden Demand

Crypto analysts point out that funding rates on XRP perpetual futures are unusually low. When funding rates are negative, shorts pay longs – a sign of crowded bearish bets.

According to on-chain strategist Darkfost, XRP’s funding rate turned negative in late 2025. That echoed similar episodes in 2024 and early 2025 that foreshadowed rallies.

Indeed, XRP’s funding flipped negative twice in 2024 and in April 2025, each time followed by a powerful bounce.

“Historically, the market tends to move against a late consensus,” Darkfost explains, noting that an accumulation of shorts creates short-term selling pressure but also “latent buying pressure” if prices begin to climb.

Retail traders are clearly spooked. According to Santiment data, XRP has fallen into an “Extreme Fear” zone after dropping roughly 19% from its early-January high.

Santiment’s data shows that positive/negative social sentiment for XRP is skewing heavily bearish. That’s a historical cue that the trend may reverse.

In fact, Santiment notes that such extreme pessimism often marks local bottoms. “Historically, this high level of bearish commentary leads to rallies. Prices move the opposite to retails’ expectations more often than not,” their analysts write.

In practical terms, when small traders are overwhelmingly negative, selling may be drying up. Coupled with the funding-rate picture above, the contrarian signal is clear: latent demand is building even as most traders are fleeing.

Exchange Outflows and On-Chain Demand

Institutional flows further highlight a supply crunch beneath the surface. Four new U.S. XRP ETFs have drawn heavy inflows. They attracted about $1.37 billion since their late-2025 debut, with no single day of net outflows.

This steady demand comes even as XRP balances on exchanges have plunged. CryptoQuant reports Binance’s XRP reserves at a two-year low. CoinGlass data also show a roughly 45% drop in Binance holdings over the past year (from $10.16 billion to $5.55 billion).

Institutional investors and long-term holders are scooping up XRP, while sell-side liquidity thins out on exchanges. Network usage has also ticked up. XRP Ledger daily transactions jumped over 50% in mid-January. They approached one million, signaling real-world usage growth.

Combined with heavy inflows, shrinking exchange supply, and rising on-chain activity, this points to quiet accumulation and a hidden bid supporting XRP price despite the flat spot chart.

Analyst Outlook and XRP Price Prediction Through 2026

Ali Martinez sees $1.78 as strong support for XRP. The price has respected this level with a solid bounce so far. The real test is $1.97–$2.00 resistance, which has capped rallies multiple times already.

A clean break above $2.00 could open the door to $2.40–$2.60 next and kick off a sharper recovery move. Until then, the price may churn between these bounds.

However, given the latent long demand in the system, many traders see $1.70–$1.80 as a relatively low-risk entry. They consider $3.00 as a medium-term upside target.

Looking out to late 2026, XRP price prediction differs but skews positive. Standard Chartered’s Geoffrey Kendrick is famously bullish, projecting $8.00 by the end of 2026. That’s roughly a 247% gain from current levels – based on the assumption of sustained ETF inflows.

On the conservative side, many models cluster around $2.50–$3.00 for 2026, with potential peaks near $4–$5 under moderate growth scenarios. Consensus XRP price predictions from multiple platforms range broadly from about $2.7 to $8.6 by year-end 2026 (average $3.9).

In simple terms, analysts’ XRP price predictions paint two cases: a base case sees steady ETF adoption and cross-border utility lifting XRP into the mid-single digits, while a bull case could exceed $8.