Reasons why XRP is poised to lead 2026 DESPITE drop below $2

The market is already hyping 2026, and there’s cause for it.

On the regulatory facet, the Readability Act, set for markup in early January, is beginning to set the tone for the broader crypto market. Based on AMBCrypto, that is the place L1s are moving into the highlight.

The logic is easy – If the Act attracts a clearer line between hypothesis and regulation, competitors amongst L1s is certain to warmth up. And, once you take a look at Ripple [XRP], it looks like bulls are already front-running that narrative.

Supply: Glassnode

Based on information from Glassnode, XRP balances on exchanges have dropped from roughly 4 billion in the direction of the beginning of the 12 months to round 1.5 billion at press time. In different phrases, sell-side liquidity has been scaling down.

On the similar time, XRP ETFs have pulled in $1.14 billion in cumulative net inflows throughout 5 merchandise, giving institutional demand a noticeable enhance. Put collectively, this traces up properly with AMBCrypto’s broader L1 thesis.

With on-chain demand for XRP holding up, bulls appear to be treating the Readability Act as a key catalyst for XRP. Particularly given how its strategic roadmap has performed out to date in 2025. 

Towards that backdrop, does XRP’s transfer under $2 look extra like a textbook reset than a real structural breakdown?

XRP’s provide squeeze faces market hesitation

Regardless of the sooner hype, 2025 hasn’t been type to the altcoin market.

From a technical angle, most alts are nonetheless buying and selling properly under their late-Q3 highs. That traces up with the Altcoin Season Index topping at 80 and now sitting at 37, exhibiting how little rotation there’s been into high-beta names.

Even prime caps haven’t been spared. 

That being mentioned, the relative drawdowns stand out. Solana [SOL] is down 40% on the 12 months, whereas XRP has slipped by 12%. Moreover, XRP’s Open Curiosity on Binance has dropped to $453 million – Its lowest degree since early 2024.

Supply: CryptoQuant

Based on AMBCrypto, this setup offers XRP a noticeable edge.

As mentioned beforehand, the Clarity Act is shaping as much as be a key tailwind for L1s. And searching again at 2025, XRP has clearly held up higher than most prime caps, with its leverage flush serving to the construction look cleaner.

Towards that backdrop, XRP’s transfer under $2 feels extra like a wholesome reset. In truth, with sturdy on-chain demand, managed leverage, and relative outperformance, the altcoin seems to be well-positioned to guide into 2026.

Closing Ideas

• XRP balances on exchanges are falling, ETFs are attracting inflows, and bulls are betting on the Readability Act.
• The dip under $2 seems to be like a reset, not a crash, conserving the altcoin well-positioned for 2026.