Entering early 2026, XRP has experienced a significant rebound, with the price increasing over 18% in a short period. Behind this rally, the influence of institutional investors cannot be underestimated. Data shows that XRP's ETP (Exchange-Traded Product) performed remarkably well — in 2025, capital inflows surged by 500%, reaching a scale of $3.6 billion. In early 2026, last week's net inflow alone was $43.16 million, with total inflows surpassing $1.18 billion. This sustained large-scale capital influx reflects institutional optimism about XRP's medium-term prospects.

On the technical side, XRP's performance is equally impressive. In the past 24 hours, it rebounded over 12%, with the current price stable around $2.3358. The price broke through multiple key resistance levels, and the upper band of the Bollinger Bands was effectively pierced, with a significant increase in trading volume providing strong support for this upward movement. The MACD indicator also shows a strong bullish crossover, with buy signals across multiple timeframes.

Regulatory developments have also contributed to boosting market enthusiasm. The Senate's advancement of the CLARITY Act and the resignation of key SEC officials have sent positive signals to the market. Additionally, Ripple's development team plans to launch major XRPL upgrades in 2026, further fueling investor excitement with expectations of ecological iteration.

However, caution is warranted as there are clear risks. The Relative Strength Index (RSI) across multiple timeframes remains in overbought territory, with the shortest cycle RSI6 reaching 95.39, indicating the market is in an extremely overbought state. Historical experience suggests that such extreme indicators often precede a correction.

Market liquidity has also shown subtle changes. The latest flow data indicates a total inflow of 15.6 million USDT, with large investors contributing 11.9 million USDT — a relatively moderate figure, hinting that some funds may be taking profits. More notably, Ripple recently transferred 300 million XRP (worth approximately $652.6 million) to an unknown wallet. Once these coins flow into exchanges, the market could face new supply pressure.

Overall, XRP is currently in a tug-of-war between institutional optimism and technical overbought signals. It might be wise to wait a bit longer before entering, to see if the market can digest these risk signals.