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

The market is already hyping 2026, and there’s a good reason for it.

On the regulatory side, the Clarity Act, set for markup in early January, is starting to set the tone for the broader crypto market. According to AMBCrypto, this is where L1s are stepping into the spotlight.

The logic is simple – If the Act draws a clearer line between speculation and regulation, competition among L1s is bound to heat up. And, when you look at Ripple [XRP], it feels like bulls are already front-running that narrative.

According to data from Glassnode, XRP balances on exchanges have dropped from roughly 4 billion towards the start of the year to around 1.5 billion at press time. In other words, sell-side liquidity has been thinning out.

At the same time, XRP ETFs have pulled in $1.14 billion in cumulative net inflows across five products, giving institutional demand a noticeable boost. Put together, this lines up well with AMBCrypto’s broader L1 thesis.

With on-chain demand for XRP holding up, bulls seem to be treating the Clarity Act as a key catalyst for XRP. Especially given how its strategic roadmap has played out so far in 2025. 

Against that backdrop, does XRP’s move below $2 look more like a textbook reset than a true structural breakdown?

XRP’s supply squeeze faces market hesitation

Despite the earlier hype, 2025 hasn’t been kind to the altcoin market.

From a technical angle, most alts are still trading well below their late-Q3 highs. That lines up with the Altcoin Season Index topping at 80 and now sitting at 37, showing how little rotation there’s been into high-beta names.

Even top caps haven’t been spared. 

That being said, the relative drawdowns stand out. Solana [SOL] is down 40% on the year, while XRP has slipped by 12%. Additionally, XRP’s Open Interest on Binance has dropped to $453 million – Its lowest level since early 2024.

According to AMBCrypto, this setup gives XRP a noticeable edge.

As discussed previously, the Clarity Act is shaping up to be a key tailwind for L1s. And looking back at 2025, XRP has clearly held up better than most top caps, with its leverage flush helping the structure look cleaner.

Against that backdrop, XRP’s move below $2 feels more like a healthy reset. In fact, with strong on-chain demand, controlled leverage, and relative outperformance, the altcoin looks well-positioned to lead into 2026.

Final Thoughts

• XRP balances on exchanges are falling, ETFs are attracting inflows, and bulls are betting on the Clarity Act.
• The dip below $2 looks like a reset, not a crash, keeping the altcoin well-positioned for 2026.