XRP Market Analysis - February 2026
Author: Bob Mason
Published: February 4, 2026
Key Points
- XRP continues its downtrend due to hawkish signals from the Federal Reserve and uncertainty surrounding the US Market Structure Bill.
- Despite short-term weakness, there is a cautiously bullish medium-term outlook for XRP driven by expectations of crypto-friendly legislation.
- Recent economic indicators and Fed comments have reduced the likelihood of a rate cut in the near term, impacting market sentiment.
Current Market Sentiment
XRP has resumed its downtrend as of February 3, 2026, influenced by various factors including AI market jitters, the Federal Reserve's interest rate path, and ongoing legislative developments in the crypto space. The token is approaching key support levels as market sentiment remains bearish.
Impact of Federal Reserve Policy
The Federal Reserve's decision to maintain interest rates at 3.75% and comments from Chair Powell have dampened expectations for a rate cut in the first half of 2026. The probability of a March rate cut has significantly decreased, which has negatively affected XRP's price.
Regulatory Challenges
Delays in the US Market Structure Bill are a significant headwind for XRP. A recent meeting involving the White House and representatives from the banking and crypto sectors did not yield substantial progress, leaving the future of crypto legislation uncertain. Coinbase's withdrawal of support for the draft text has further complicated matters.
XRP's Price Trends
Since reaching a high of $2.4151 on January 6, XRP has fallen to a low of $1.5021 by January 31. The ongoing uncertainty regarding regulatory developments has led to a bearish trend, with analysts noting that the Banking Committee's draft text is crucial for the DeFi space.
ETF Market Dynamics
Fading expectations of a Fed rate cut and regulatory delays have cooled demand for XRP-spot ETFs, resulting in net outflows. Despite this, the XRP-spot ETF market has seen significant inflows since its inception, contrasting with the BTC-spot ETF market's outflows.
Price Forecasts
Short-term forecasts indicate a bearish outlook with a target price of $1.5. However, medium-term projections (4-8 weeks) suggest a potential rise to $2.5, and longer-term targets (8-12 weeks) could reach $3.0, contingent on favorable regulatory developments and market conditions.
Risks to the Outlook
Several risks could derail the bullish medium-term outlook, including:
- Hawkish monetary policy from the Bank of Japan.
- Strong US economic data that diminishes rate cut expectations.
- Delays or opposition to the Market Structure Bill.
- Extended periods of net outflows from XRP-spot ETFs.
Technical Analysis
XRP's recent price action shows it trading below key moving averages, indicating a bearish bias. Key levels to watch include support at $1.50 and resistance at $1.75, with a breakout above $1.75 potentially signaling a bullish trend reversal.
Conclusion
The outlook for XRP remains heavily influenced by regulatory developments, Federal Reserve policy, and ETF flows. Progress on the Market Structure Bill could significantly boost XRP demand, while geopolitical risks and economic indicators will continue to shape near-term price trends.
Future Projections
In summary, the medium-term outlook suggests a potential move to $2.5, with longer-term targets reaching $3.0, contingent on favorable developments in the regulatory landscape and market sentiment.