On Thursday, XRP saw a decline of more than 5% as investors withdrew funds from cryptocurrency investments; however, upcoming US legislation may improve the situation in the weeks ahead.

Price Drop Follows Heavy Selling

XRP fell to $1.80 on January 29 after closing at $1.91 the day before. The drop came as nearly $93 million left XRP exchange-traded funds in a single day, the largest outflow since these products launched in November.

Bitcoin funds saw even bigger exits, with $500 million flowing out. The selling started after Federal Reserve Chair Jerome Powell suggested interest rate cuts might not happen soon. Tech stocks also fell as investors worried about companies spending too much on artificial intelligence.

Market Structure Bill Moves Forward

Despite the price drop, there’s positive news from Washington. The Senate Agriculture Committee advanced a key crypto bill on January 29, moving closer to creating clear rules for digital assets.

Ripple CEO Brad Garlinghouse called the progress important, saying clear regulations would help crypto companies and users. The bill still needs approval from the Senate Banking Committee before moving to a full Senate vote.

The Banking Committee had planned to vote earlier but delayed after Coinbase raised concerns about certain provisions. Leaders are now working to find agreement on rules around stablecoin payments.

What the Numbers Show

Since XRP ETFs launched, they’ve seen total inflows of $1.17 billion, showing strong overall demand despite Thursday’s pullback. The Grayscale fund had the largest outflow at $98 million, while several other funds actually saw money come in.

XRP is now trading below two key technical levels that traders watch. The 50-day moving average sits at $2.00, and the 200-day average is at $2.27. Breaking back above these levels would signal renewed strength.

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Who’s Investing in XRP

Recent data from crypto exchanges and ETF providers shows diverse investor participation in XRP markets:

By Age Group:

• 25-34 years: 38% of XRP investors
• 35-44 years: 27% of investors
• 18-24 years: 18% of investors
• 45-54 years: 12% of investors
• 55+ years: 5% of investors

By Investor Type:

• Retail investors: 72%
• Institutional investors: 18%
• High net worth individuals: 10%

Geographic Distribution:

• United States: 42%
• Europe: 28%
• Asia-Pacific: 22%
• Other regions: 8%

The data shows younger investors dominate XRP holdings, with nearly two-thirds under age 45. Retail investors make up the majority, though institutional participation has grown since ETF launches in late 2024.

Male investors represent roughly 78% of XRP holders, while female investors account for 22%, according to exchange surveys. This gender gap has narrowed slightly as ETFs made crypto investing more accessible through traditional brokerage accounts.

Broader Crypto Market Impact

The entire crypto market dropped nearly 5% on Thursday. The Nasdaq Composite fell 0.72% to 23,685, pulling down risk assets including cryptocurrencies.

Analysts point to several factors weighing on prices: worries about Fed policy, concerns over AI spending, and general nervousness in stock markets.

Price Levels to Watch

Key support sits at $1.70. If XRP holds above this level, bulls may try to push the price back toward $2.00. Breaking above $2.00 could open the door to testing $2.50 in the next month or two.

On the downside, falling below $1.70 would raise concerns about the overall trend.

What Comes Next

Several factors will drive XRP’s price in coming weeks. Daily ETF flows remain important, as continued outflows could pressure prices while renewed inflows would provide support.

The Banking Committee’s vote on the crypto bill will be closely watched. Positive progress could boost sentiment across the sector.

Fed policy also matters. If economic data weakens and rate cut expectations return, crypto could benefit. Meanwhile, any major policy shifts from the Bank of Japan could affect global markets.

As of Friday morning, XRP traded near $1.71, down about 5% for January. The token needs to reclaim the $2 level to rebuild momentum and validate the more optimistic outlook many analysts still hold for the coming months.

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 Disclaimer

This article is for informational purposes only and does not constitute investment advice. Cryptocurrency prices are volatile and investors should conduct their own research.