XRP Price Prediction: Senate's New Legislation Sparks Market Volatility, Bulls Hold the Critical $2 Support Level

The U.S. Senate Banking Committee released the highly anticipated “Market Structure Bill” draft text on January 13, unexpectedly sparking criticism from industry giants, causing XRP price to drop 1.24% on January 14, closing at $2.1376.

Coinbase CEO Brian Armstrong directly stated that the draft is “worse than the current situation,” potentially expanding the authority of the U.S. Securities and Exchange Commission (SEC) and restricting industry innovation, which heightened market concerns over XRP’s regulatory outlook. However, Ripple CEO Brad Garlinghouse viewed the bill as “a significant step forward,” highlighting internal industry disagreements on the regulatory path. Despite short-term volatility, strong capital inflows into XRP spot ETFs, tangible utility growth from Ripple’s business expansion, and expectations of a positive legislative outcome collectively support a short-term bullish case. Analysts emphasize that holding the $2 psychological level is crucial; if fundamentals remain positive, XRP could challenge the $3 target within the next 4 to 8 weeks.

Legislative Turmoil: Senate Draft Sparks Waves, Industry Giants Take Divergent Stances

On January 13, 2026, the U.S. Senate Banking Committee unveiled its bipartisan draft of the “Market Structure Bill,” laying the groundwork for a vote scheduled for January 15. This development should have been a boost for the crypto market, as clear regulatory frameworks are prerequisites for large-scale institutional capital inflows. The announcement initially boosted the market, with XRP surging to $2.4151 on January 6 amid optimistic expectations. However, details of the draft soon cooled the enthusiasm. Coinbase CEO Brian Armstrong publicly voiced his opposition 48 hours after reviewing the draft, explicitly stating that he “cannot support the current version” and warning that “this draft may be worse than the status quo.” His sharp criticism quickly fermented in the market, raising fears that the bill might “set back” progress.

Armstrong’s criticism is not unfounded; he pointed out several key clauses in the draft that could stifle industry innovation. First, the draft could effectively ban “tokenized securities,” closing the door to efficient on-chain transfer of traditional assets. Second, it includes severe restrictions on decentralized finance (DeFi), such as granting the government unlimited access to user financial records, directly challenging core crypto values of privacy and autonomy. More concerning is Armstrong’s view that the draft erodes the authority of the Commodity Futures Trading Commission (CFTC), subordinating it to the SEC, which could strengthen SEC’s regulatory dominance in crypto. Given the recent end of a lengthy lawsuit between SEC and Ripple, any expansion of SEC power is highly sensitive.

In stark contrast to Armstrong’s fierce opposition, Ripple, caught in the regulatory storm, gave a positive assessment of the draft. Ripple CEO Brad Garlinghouse called it “a significant step forward,” believing it provides a “viable framework” for cryptocurrencies. This divergence in attitude is meaningful: as a company that fought the SEC and achieved partial victory, Ripple likely craves any form of “certainty,” even if imperfect, over the current ambiguous regulatory environment. Garlinghouse’s mantra of “clarity over chaos” resonates with many market participants. Internal industry disagreements reflect the complexity of crypto regulation and the differing demands of market players based on their business models.

Regulatory Chains and Dawn: XRP’s Sensitive Nature Under SEC Shadow

XRP’s sensitivity to U.S. regulatory developments far exceeds that of most other cryptocurrencies, stemming from its well-known legal entanglement with the SEC. Although in August 2025, the U.S. appellate court approved the SEC and Ripple’s joint request to dismiss their appeal, ending a five-year lawsuit, and the SEC withdrew its appeal against the “programmatic sale of XRP does not constitute an investment contract” ruling, the threat of regulation has never truly disappeared. Any legislative move that could enhance SEC’s authority immediately triggers XRP holders’ nerves. Armstrong’s warning that the bill might strengthen SEC’s powers led some funds to shift out of XRP into assets like Bitcoin, perceived as having lower regulatory risk.

However, the lawsuit’s resolution also opened a new chapter for XRP. Judge Analisa Torres’s historic ruling in July 2023 not only cleared some hurdles for XRP trading in the U.S. but also paved the way for the listing of U.S. XRP spot ETFs. The ETF launch is a key milestone for institutional adoption, allowing traditional investors to access XRP via familiar stock accounts without dealing with the technical complexities of cryptocurrencies. Since its launch, XRP spot ETFs have continued to see strong capital inflows, forming one of the most solid foundations for its price support. Meanwhile, legal clarity enables Ripple to restart and expand its U.S. operations, increasing XRP’s practical utility in cross-border payments through products like On-Demand Liquidity (ODL). This “practicality narrative” is fundamental to long-term value.

The ongoing debate over the bill will determine the future regulatory paradigm for the U.S. crypto industry. If the bill ultimately favors strengthening SEC’s centralized oversight, a future anti-crypto administrative authority could leverage this law to launch new legal challenges against digital assets. Conversely, establishing CFTC’s jurisdiction over most tokens as commodities and explicitly exempting assets with prior judicial rulings like XRP would greatly boost market confidence. Therefore, the Senate Banking Committee’s review and subsequent amendments are not just about a bill’s text but are shaping the “rules of the game” for XRP and the entire crypto market. The market is holding its breath, watching whether legislators can strike a real balance between consumer protection and fostering innovation.

XRP Price Forecast and Key Technical Levels: Crossroads of Bulls and Bears

Driven by fundamental news, XRP’s price action exhibits typical “news-driven” characteristics. On January 14, XRP fell 1.24% to $2.1376, underperforming the overall crypto market (which rose 1.09%). This correction can be seen as profit-taking and market sentiment fluctuation ahead of a major event (the January 15 committee vote). From a broader perspective, XRP rebounded strongly from its December 31, 2025 low of $1.8746, reaching an eight-week high of $2.4151 on January 6, a nearly 29% rally, which itself has built-in correction pressure. Currently, the price is at a critical short-term technical decision point.

XRP Key Technical Levels Overview

• Immediate support: $2.0 (psychological level), 50-day Exponential Moving Average (EMA) at $2.0796.
• Strong support: $1.75, $1.50.
• Immediate resistance: 200-day EMA at $2.3273.
• Upside targets: $2.5 (short-term), $3.0 (mid-term 4-8 weeks), $3.66 (long-term 8-12 weeks).

From a technical perspective, XRP remains above the 50-day EMA, a short-term bullish signal. However, the price staying below the 200-day EMA reveals a long-term trend that has yet to turn fully optimistic. This short-term bullish/long-term cautious alignment reflects the market’s complex sentiment. For traders, $2 is not just a psychological level but a vital support to maintain the current rebound structure. A successful break and stabilization above $2.2 could attract more buying interest, challenging the 200-day EMA resistance. A volume breakout above the 200-day EMA would be seen as a clear sign of trend reversal, opening further upside toward $2.5 and beyond.

Fundamental factors will resonate with technical signals. In the short term, three main drivers will influence prices: first, capital flows into XRP spot ETFs—continued net inflows fuel the bull case; second, macroeconomic data (like CPI, employment reports) and Federal Reserve monetary policy expectations—rate cut expectations will benefit all risk assets; third, and most importantly, the progress, amendments, and final vote on the “Market Structure Bill” in the Senate. Any crypto-friendly revisions could catalyze a new XRP rally. Overall, as long as prices hold above $2 and ETF inflows remain healthy, the probability of testing $2.5 in the medium term is high.

What is XRP: Token Features and Ecosystem Overview

To analyze its price movements and regulatory prospects thoroughly, it’s essential to understand XRP itself. XRP is the native cryptocurrency of the Ripple network, designed as an efficient, low-cost cross-border payment settlement tool for global financial institutions. Unlike Bitcoin’s Proof of Work (PoW) mechanism, XRP uses a unique consensus protocol—the Ripple Protocol Consensus Algorithm (RPCA)—where a set of trusted validators confirm transactions, enabling extremely fast confirmation times (3-5 seconds) and negligible fees. These technical features underpin its core narrative as a “bridge currency” for cross-border payments.

XRP’s tokenomics are distinctive. Its total supply cap is 100 billion tokens, all created at genesis with no mining issuance. A portion is held by Ripple and placed in escrow, released gradually according to a schedule. This model has been controversial, with critics citing high centralization risk, potentially impacting market prices. Supporters argue that a predictable release schedule offers supply-side transparency, and Ripple’s significant holdings align its interests with the success of the XRP ecosystem. Recently, Ripple has been actively expanding its ecosystem through products like ODL to increase XRP’s actual usage and utility, aiming to reduce “sell pressure” perceptions.

Ripple’s ecosystem extends beyond XRP tokens. Its core business is providing enterprise blockchain solutions via RippleNet for financial institutions, with XRP serving as a liquidity asset within that framework. The company is also involved in central bank digital currencies (CBDC) projects, offering technology platforms for national digital currencies. Understanding this is crucial: XRP’s price performance is influenced not only by overall crypto market sentiment and regulation but also by Ripple’s business expansion, partnerships, and adoption of its technology by financial institutions. Recent US business reactivation and expansion by Ripple are positive signals of fundamental improvement, supporting XRP’s long-term value.

Is XRP Worth Buying? Investor Guidance

In the face of a complex and volatile market environment, investors must remain clear-eyed about risks while seeking potential gains. Several scenarios could reverse the current bullish outlook. First, an unexpected macroeconomic shift is the biggest variable. If the Bank of Japan (BOJ) signals a hawkish stance, raising the neutral rate to 1.5%-2.5%, it could trigger large-scale yen carry trades unwinding, tightening global liquidity and pressuring risk assets. Second, if U.S. economic data remains strong, prompting the Fed to delay or reverse rate cuts in H1 2026, risk appetite could decline sharply. Both scenarios would dampen interest in high-risk assets like XRP.

Third, setbacks in regulation are direct risks. If the “Market Structure Bill” is rejected or heavily amended in the Senate, undermining current market optimism, XRP could quickly fall below $2, testing support at $1.75 or even $1.5. Additionally, persistent outflows from XRP spot ETFs would indicate waning institutional interest, undermining upside momentum. A confirmed breakdown below $2 and sustained below could invalidate the rebound since December 2025, turning sentiment bearish and initiating a new downtrend.

Different investors should adopt tailored strategies. For long-term value investors, a “core-satellite” approach might be suitable: holding XRP as part of a “satellite” allocation, deploying positions on dips near key supports (like $2 or the 50-day EMA), while strictly controlling overall portfolio weight to hedge against high policy uncertainty. Close attention should be paid to amendments after the January 15 vote and latest statements from regulators like the SEC. Short-term traders can consider trading within the $2.0–$2.33 (200-day EMA) range, executing buy-sell strategies accordingly. Regardless of approach, strict stop-loss discipline (e.g., exiting if below $1.95) is essential to protect capital amid market volatility. Remember, survival in crypto is more important than short-term gains.