Volatility caused by the election results in Japan
At the beginning of the second week of February, XRP found itself in a critical window, as the digital asset attempted to establish a bottom after a tumultuous start to 2026. Following a pullback from January's peak of $2.40, the token is currently fluctuating within a narrow range between $1.40 and $1.44, dividing traders into those who expect a recovery and those who foresee a deepening downturn.
XRP experienced a sharp spike in volatility during Monday's trading session, retreating from an intraday peak of $1.45 as initial optimism surrounding the results of Japan's general elections began to fade. The price dynamics of the digital asset reflected a broader cooling in the risk asset fund, triggered by a sell-off reaction to the news of the Liberal Democratic Party's victory.
The initial spike was driven by investor enthusiasm for the pro-growth, expanding fiscal mandate of Japan's Prime Minister Sanae Takahichi. However, the 'Takahichi Trade' momentum has slowed due to global macroeconomic issues. Similar to Bitcoin, which faced strong selling pressure, temporarily dropping below the psychological threshold of $69,000, XRP experienced a sharp decline to an intraday low of $1.37.
At the intraday peak, XRP's market capitalization was approximately $88.3 billion. Following the drop, this figure sharply decreased by more than $3 billion, reaching a bottom of around $85.25 billion.
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Institutional support through spot ETFs
Meanwhile, the technical landscape for XRP is characterized by what analysts call 'compression'. The price is currently under a significant cluster of upper resistance. Short-term momentum is constrained by the 20 and 50-day exponential moving averages (EMAs), which have converged in the zone around $1.44–$1.46. This zone has acted as a solid retracement point over the last 48 hours.
At the declining level, the 200-day EMA around $1.43 serves as a key line of defense. A decisive close below this level could trigger a liquidity hunt to the lows of February 5.
Although technical indicators, including the neutral relative strength index (RSI) of 46, suggest a waiting market, the fundamental data tells of institutional resilience. Despite a 40% drop in price from January peaks, XRP spot exchanges in the US have crossed the threshold of a total inflow of $1.2 billion.
Notably, on February 6, as broader markets fluctuated, XRP exchanges saw a net inflow of $15.16 million, led by products B*****e and F******n T******n. This structural buying provides unique protection for XRP, which was absent in previous cycles, possibly preventing full capitulation.
Market participants are now looking forward to the upcoming XRP Community Day from February 11 to 12. As Ripple plans to unveil its roadmap for 2026, including the integration of smart contracts and institutional credit protocols, this event could provide the fundamental spark needed to break the current technical stalemate.
While XRP remains a story of waiting, caught between seller exhaustion and a cautious return of institutional appetite.