Introduction Good morning and welcome to BitMorpho's Daily News & Fundamentals report for Wednesday, January 21, 2026. The crypto market is exhibiting extreme risk-off sentiment today, as Bitcoin has fallen below the critical 90,000 level, mirroring broader turbulence across global financial markets. This sell-off is largely attributed to escalating geopolitical tensions, specifically citing the White House's threat of tariffs on European nations and related frictions over Greenland, leading to capital flight from risk assets into safer havens like gold. For XRP, the general market downturn is applying downward pressure, with reports indicating the token is struggling to maintain the psychologically significant 2.00 support level, dropping to around 1.95. Despite this price action, the fundamental narrative for XRP remains robust, highlighted by continued strong institutional interest, evidenced by consistent net inflows into Spot XRP ETFs since their late 2025 launch. On-chain data reinforces this long-term view, with exchange reserves sitting at a seven-year low, suggesting significant tokens are being locked away by institutional custodians, which could pose a future supply shock risk. Furthermore, regulatory progress continues in Europe, with Ripple receiving preliminary approval for an e-money license in Luxembourg. While Bitcoin and Ethereum test key support levels, XRP's underlying utility especially in cross-border payments and regulatory milestones positions it uniquely as infrastructure being accumulated, even as daily price action appears gloomy. We will track if this macro fear subsides or deepens and how XRP's on-chain metrics react to the broader market's dash for safety. News Analysis XRP: Institutional Rails Accumulate Amid Macro Turbulence While the broader cryptocurrency landscape reels from a significant risk-off move, evidenced by Bitcoin's drop below 90,000, XRP is demonstrating a classic case of infrastructure being accumulated despite daily price headwinds. The token has slipped from its recent highs, testing the crucial 2.00 support level, with dips reaching as low as 1.8930 amid global geopolitical jitters stemming from White House tariff threats, particularly concerning Greenland. However, the fundamental story supporting XRP remains anchored in robust institutional adoption and regulatory maturation. Regulatory Milestones Solidify European Footprint The narrative of compliance continues to strengthen XRP’s institutional appeal. Following recent UK regulatory progress, Ripple has secured *preliminary* approval for an Electronic Money Institution (EMI) license from Luxembourg's financial regulator, the Commission de Surveillance du Secteur Financier (CSSF). This "Green Light Letter" is a significant step toward full authorization, allowing Ripple to potentially passport regulated payment services across the European Union, using Luxembourg as a central hub. This expansion of Ripple’s regulated operational base across major financial jurisdictions like the UK and EU positions it as one of the most institutionally compliant entities in the digital asset space. On-Chain Dynamics Signal Supply Shock Potential The persistent downward price pressure is running headlong into severe exchange liquidity constraints. The data confirms that institutional accumulation via the late-2025 launched Spot XRP ETFs is successfully pulling supply off-exchange. * Exchange Reserves at Seven-Year Low: The total amount of XRP held on centralized exchanges has plummeted to approximately 1.6 billion tokens, the lowest level recorded since 2018. This drastic reduction in the readily available "float" is a direct consequence of ETF custody requirements, which move XRP into cold storage. * ETF Inflow Consistency: Since their launch, U.S. XRP ETFs have seen consistent net inflows, accumulating around $1.37 billion by early January 2026, with an impressive streak of positive inflows that surpassed that of BTC and ETH funds during the same period. This structural demand for XRP as a regulated settlement asset is occurring independently of broader market sentiment, suggesting positioning based on mandates rather than speculation. This divergence weak daily price action versus critically low exchange supply driven by structural ETF buying suggests a significant potential for future supply-side driven rallies should broader market fear subside. Ecosystem Utility Expands: RWA and Stablecoins Lead Beyond payment settlement, the XRP Ledger (XRPL) is gaining traction as a platform for next-generation financial products. The ecosystem’s Total Value Locked (TVL) in Real-World Asset (RWA) tokenization has jumped by over 43% in the last 30 days, exceeding $400 million. This growth is supported by key players like VERT Capital and Mercado Bitcoin. Furthermore, the adoption of Ripple’s own USD-backed stablecoin, RLUSD, is accelerating, particularly in Asia through a partnership with SBI Holdings, aimed at remittances settled on the XRPL. Ripple President Monica Long has emphasized that stablecoins like RLUSD are intended to be the *foundation* for global settlement, not merely an alternative rail. Market Sentiment: Resilience Despite Macro Drag While the macro environment, influenced by geopolitical tensions and concerns over U.S. fiscal policy, is forcing risk assets lower, XRP’s on-chain metrics suggest underlying buyer conviction. Some analysts note a bullish divergence on the daily chart, where capital inflows are improving despite the falling price, indicating that "weak hands" may be exiting while larger holders are absorbing the supply. Although XRP is currently testing support around the 2.00 mark, the foundation built upon regulatory compliance and structural accumulation via ETFs provides a defensive posture against the current market panic. Outlook Conclusion: Institutional Accumulation Outweighs Short-Term Price Pain The daily report paints a decidedly mixed, yet fundamentally bullish, picture for XRP. While macro turbulence and geopolitical fears have undeniably pushed the token below the critical 2.00 support, testing lows near 1.8930, the underlying structural developments suggest a divergence between short-term price action and long-term positioning. The regulatory milestones in Europe, specifically the preliminary EMI license from Luxembourg's CSSF, significantly de-risk Ripple's operational footprint, cementing its status as an institutionally compliant leader poised for EU-wide service passporting. Concurrently, the on-chain data highlights an intensifying supply shock, with exchange reserves hitting seven-year lows as Spot ETF inflows continue to drain the readily available float. Moving into the next 24 to 48 hours, investors must closely monitor the 1.85 - 1.90$ zone as the immediate battleground. A sustained defense of this floor, despite lingering market volatility, would confirm the strength of institutional accumulation observed. Conversely, a decisive break below would suggest short-term selling pressure is still dominating. Regardless of the immediate price flicker, the foundation for XRP's utility and compliance remains exceptionally strong. *Disclaimer: This report is for informational purposes only and does not constitute financial advice. Always conduct your own due diligence before making investment decisions.*