XRP’s Burn Frenzy: Why Ripple’s Comeback Is Fueling a Volatility Powder Keg

If you blinked, you missed it: XRP, the market’s perennial underachiever, has just staged the kind of comeback that makes even the most jaded crypto desk do a double take. After weeks of drifting in the doldrums, testing lows not seen since the crypto ice age of 2023, XRP is suddenly back on every trader’s radar. The catalyst? A record-breaking token burn rate and a price surge that’s left most holders still underwater, but at least breathing.

Let’s not sugarcoat it: XRP’s price action over the last year has been a masterclass in disappointment. The token broke below its realized price support, leaving the majority of holders deep in the red. According to Coinpaper, this mass capitulation set the stage for a dramatic reversal. U.Today reports that XRP’s burn rate has now hit its highest level of 2026, a technical signal that’s historically coincided with major inflection points. The price has come roaring back, with a sharp bounce that’s left short sellers scrambling for the exits. Yet, for all the fireworks, the average XRP bagholder is still licking their wounds, nursing losses from the last leg down.

The news cycle is feeding the frenzy. CryptoPotato notes that XRP, alongside SOL, is among the top performers in the wake of the latest market crash. Still, the narrative is hardly bullish across the board. Coinpaper’s data shows that, despite the rebound, most XRP holders remain underwater. This is the classic crypto paradox: a coin can rally 30% in a week and still leave its community in existential despair. Meanwhile, U.Today’s coverage of the burn rate spike suggests that Ripple’s network is seeing a structural shift in supply dynamics, one that could either fuel a sustained rally or set up a wicked bull trap.

To understand why this matters, zoom out. XRP’s realized price break is not just a technical footnote, it’s a psychological event. When a token trades below its realized price, it signals that the average holder is in the red. Historically, this has been the crucible for capitulation and, occasionally, the launchpad for monster rallies. But context is everything. The broader crypto market is still reeling from Bitcoin’s recent volatility, with liquidity drying up and risk appetite on life support. In this environment, XRP’s resurgence looks less like a new bull cycle and more like a classic short-covering rally, turbocharged by a sudden supply crunch.

There’s also the question of what’s driving the burn. XRP’s burn mechanism isn’t as headline-grabbing as Ethereum’s, but it matters. Every transaction destroys a tiny amount of XRP, and when network activity spikes, so does the burn rate. U.Today’s reporting suggests that the latest surge is being driven by a combination of renewed on-chain activity and panic transactions as traders reposition. This isn’t necessarily a sign of organic demand. It could just as easily be the market’s way of clearing out weak hands before the next leg down.

Of course, the XRP faithful will point to the burn rate as evidence that supply-side pressure is mounting, setting the stage for a squeeze. But let’s not get carried away. XRP’s history is littered with false dawns and failed breakouts. The real story here is not that XRP is about to moon, but that the market is entering a period of heightened volatility where technicals matter more than fundamentals.

Strykr Watch

The technicals are a minefield. XRP’s realized price now sits as overhead resistance, with the next major support lurking uncomfortably close. RSI is flashing overbought on the hourly, but the daily chart still looks battered. The burn rate spike is a double-edged sword, it signals activity, but also desperation. If XRP can reclaim and hold above its realized price, the path to a sustained rally opens up. But a failure here and the bulls risk getting trapped in another liquidity vacuum. Watch for volume spikes and forced liquidations as the next catalyst.

On-chain data shows a surge in wallet activity, but not all of it is bullish. Whale transfers are up, suggesting that some large holders are using the rally to exit. This is classic distribution behavior. Unless retail steps in to absorb the supply, any further gains could be short-lived. The Strykr Watch to watch: support at the recent swing low, resistance at the realized price, and the psychological round number above.

The risk is that XRP’s rally is nothing more than a reflexive bounce in a market starved for positive catalysts. If the broader crypto market rolls over again, XRP will not be spared. A failure to hold the current support zone could trigger another cascade of liquidations, especially with so many holders still in the red. On the other hand, if the burn rate continues to accelerate and on-chain activity remains elevated, the setup for a squeeze is real.

Traders looking for opportunity should be nimble. This is a market for scalpers and short-term swing traders, not long-term believers. The best setups will come on pullbacks to support, with tight stops and quick profit targets. If XRP can break above its realized price and hold, there’s room for a run to the next resistance. But don’t overstay your welcome, this is still a high-risk, high-volatility environment.

Strykr Take

XRP’s burn-fueled comeback is a volatility event, not a new bull market. The technicals are screaming caution, but the setup for a short-term squeeze is real if supply dries up. For traders with an appetite for risk and a quick trigger finger, this is the kind of market that can make or break a month. Just don’t mistake activity for conviction. The real winners will be those who know when to step aside and when to pounce.

datePublished: 2026-02-07 12:00 UTC