U.S. spot XRP exchange-traded funds (ETFs) recorded their inaugural net outflows on Wednesday, abruptly ending a continuous 36-day accumulation phase that saw investors inject substantial capital. A total of $40.8 million exited the XRP ETF space, chiefly driven by $47.25 million withdrawing from the 21Shares XRP ETF (CBOE: TOXR).
This reversal is significant considering that since the November 13, 2025 launch of the Canary XRP ETF (NASDAQ: XRPC), these funds had collectively attracted approximately $1.25 billion in net inflows. The latest outflows represent about 3% of that cumulative capital influx. While 21Shares’ TOXR experienced the most pronounced outflow, other funds like Canary, Bitwise, and Grayscale witnessed modest net inflows themselves, roughly $2 million each, partially cushioning the broader exit.
Rachael Lucas, a Crypto Analyst at BTC Markets, interprets these outflows primarily as profit-taking activity against the backdrop of XRP's recent appreciation. Over the span of a single week, XRP's price escalated from $1.80 to a peak near $2.40 before this pullback. Additionally, a wider retracement across the cryptocurrency market appears to have contributed to the sell-off.
Despite these outflows, Lucas highlights on-chain metrics that suggest enduring resilience in XRP’s fundamentals. For instance, exchange reserves of XRP remain historically low, and transaction volumes are elevated, both indicative of continued underlying demand. Should fresh inflows recommence, there is a pathway for XRP to revisit and potentially surpass the $3 level.
Wednesday’s redemptions were not confined to XRP ETFs alone. Spot Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) ETFs similarly faced considerable net outflows during the same period. Bitcoin ETFs collectively saw $486 million withdrawn. Specific funds affected include Fidelity Wise Origin Bitcoin Fund (CBOE: FBTC), which lost $247.6 million, and BlackRock’s iShares Bitcoin Trust (NASDAQ: IBIT), which experienced $130 million in outflows.
Ethereum-focused ETFs combined to surrender $98.5 million, with Grayscale’s ETHE product accounting for $52 million of that decline. This marks the first day of net outflows for Ethereum ETFs in 2026, following $457 million of net inflows during the initial three trading sessions of the year.
Lucas interprets these movements among Bitcoin and Ethereum ETFs as a natural rebalancing process after recent bullish rallies, including Bitcoin's surge toward $94,000, accompanied by a run-off of leveraged positions. Complementing this perspective, Min Jung, a Research Associate at Presto Research, comments that cryptocurrencies have underperformed relative to other asset classes recently. Investors have exhibited a greater propensity to maintain or initiate stock positions, reflecting a sentiment shift that favors traditional markets over crypto in the current environment.
From a technical perspective, XRP’s price action substantiates the challenges facing the coin amid this broader market environment. The token declined over 3% on the day, wiping out gains made during the previous week and violating a key support threshold at the 20-day exponential moving average (EMA), situated at approximately $2.03.
XRP's earlier trajectory saw a 22% appreciation from a December low near $1.77, reaching about $2.16 by January 5. However, in just three sessions following that peak, much of these advances were surrendered. The recent breach below the 20 EMA marks the first time this support has failed since the recovery phase initiated in December, signifying a weakening trend.
The unsuccessful breakout attempt at the $2.45 to $2.50 price range catalyzed aggressive selling pressure. At present, the price fluctuates between the 20 EMA ($2.03) and the 50 EMA support level ($2.07). Furthermore, the Supertrend indicator has turned bearish at about $1.96, positioned just beneath the current trading price, acting as a near-term critical support.
Notably, XRP has endured a 15% drop from the January 5 high within two days, effectively erasing a significant portion of its incremental gains since December. To stabilize and potentially instigate a recovery, XRP must reclaim the 50 EMA level at $2.07. Surpassing this would open the way toward re-achieving previous resistance points at $2.16 and $2.22 (the 100 EMA). A breach above the 200 EMA at $2.34 would be necessary to reaffirm a bullish market structure.
On the downside, immediate support is visible at the 20 EMA ($2.02), followed by the Supertrend level ($1.96). A drop beneath $1.95 would likely expose XRP to the December low of $1.77, with the potential for an extended decline toward $1.60, testing deeper support levels.
Overall, the recent outflows in XRP ETFs, accompanied by similar trends in Bitcoin and Ethereum funds, underscore a phase of correction or consolidation within the cryptocurrency sector. The combination of profit-taking, market-wide pullbacks, and noteworthy technical breakdowns for XRP suggest that investors are reassessing risk and repositioning within crypto assets after a strong start to the year.