XRP Price Struggles: Key Factors Hindering Recovery

After encountering resistance at the $1.60 mark, XRP has witnessed a downturn, dropping approximately 8% and settling within the $1.35–$1.40 range. Analyst Sam Daodu has identified three interrelated issues that have curtailed recent XRP price hikes and outlined what changes are necessary for a more sustained recovery.

To begin with, Bitcoin’s dominance in the cryptocurrency market remains a significant factor. Daodu highlights that Bitcoin’s market share has largely hovered around 58.6% throughout much of 2026. Historically, significant rallies in alternative cryptocurrencies, or altcoins, typically commence when Bitcoin’s dominance falls below the 50% threshold, prompting money to flow into smaller tokens. However, this rotation has not yet materialized. Rather than diversifying into altcoins, institutional investors appear to be either exiting the crypto space entirely or seeking refuge solely in Bitcoin. According to Daodu, until Bitcoin secures a firm position above $75,000, it will be hard for strong fundamentals of XRP to drive any substantial price changes.

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Another challenge comes from large investors, or ‘whales’, who have been steadily cashing in profits since XRP peaked at $3.65 in July 2025. Daodu estimates that nearly $6 billion in XRP has been liquidated by these whales, with considerable amounts still being directed to exchanges. Many of these large holders initially acquired their XRP at prices lower than $0.65, making them inclined to sell during price rallies to lock in profits, and this behavior contributes to short-lived price surges.

Moreover, a significant segment of XRP holders find themselves at a loss, perpetuating the resistance at current price levels. Data from Glassnode indicates that about 60% of the circulating XRP has a cost basis exceeding current market prices, with the average cost basis being around $1.44. Since this average aligns closely with the recent trading range, those holders who are experiencing losses tend to sell as prices near breakeven, often treating $1.45 as a target for profit-taking.

Even if XRP manages to break through the $1.45 barrier, the potential for further selling looms. Daodu notes that there are clusters of holders from the $1.40 to $3.65 price range who are looking to recoup their investments, which means that upward movements are likely to encounter ample selling pressure.

Additionally, exchange-traded funds (ETFs) targeting XRP are facing their own set of challenges. The total assets under management in these funds have decreased from a peak of $1.65 billion in January to around $1 billion as the token’s price has declined. With current inflow rates estimated at around $1.9 million per week, Daodu argues that these ETFs may only accumulate about $100 million by the year’s end, a figure that is insufficient to significantly absorb the current supply of XRP.

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Looking ahead, Daodu suggests that the introduction of the long-anticipated US crypto market structure bill, known as the CLARITY Act, could serve as a crucial catalyst for change. Despite facing considerable opposition in recent months, its passage could formally classify XRP as a commodity. This shift might alleviate regulatory uncertainties, paving the way for broader institutional adoption, which could, in turn, prompt banks to utilize XRP for settlements instead of relying on alternatives, such as Ripple’s RLUSD stablecoin. Such developments could create the demand pressure necessary to push XRP beyond its current trading constraints.

In essence, Daodu emphasizes that a confluence of factors is required for a shift in XRP’s trajectory: a movement of capital away from Bitcoin, reduced selling pressure from large holders, increased inflows into ETFs, or a significant regulatory event that encourages institutional participation. Until multiple factors align, the analyst believes XRP rallies will likely remain fleeting, with the token continuing to trade within its recent range.