Is XRP Undervalued in 2026 or Still Exposed to Legal and Macro Risks?

XRP has re-emerged as one of the top cryptocurrencies for investors to debate. The asset currently sits at the centre of a high-risk and high-reward narrative. The regulatory pressure is easing amid increased ETF speculation. Ripple is also expanding into the stablecoin and tokenization markets. This creates an ideal situation for the asset to get ready for a decisive move.

Market Positioning: Liquidity and Cycle Dynamics

XRP is currently one of the most liquid altcoins as its market capitalization ranks it among the top cryptocurrencies. The digital asset profits when Bitcoin dominance goes down as investors shift their funds toward large-cap cryptocurrencies. 

XRP experiences increased trading activity during mid-cycle altcoin periods when investors look for cryptocurrencies that have not yet matched Bitcoin price increase. 

The market shows divided trader positions as volatility stays high. Traders show active market involvement through their patterns of taking profits after major price increases and subsequent decline in their positions. 

Trading activity suggests accumulation and distribution but they create uncertainty without strong directional conviction.

Regulation: Reduced Risk, Not Eliminated

The SEC lawsuit which began in 2020 and continued for many years brought major changes to XRP's exchange listings and its availability to institutions. 

The partial legal clarification that emerged from court proceedings has reduced the risks that affected market distribution. The asset still faces some regulatory exposure which has not yet been resolved. 

Future enforcement actions, penalty decisions and US government shifts in cryptocurrency regulations will create new market volatility. The legal investigation of XRP as an asset makes it both highly tested and vulnerable to news coverage.

Institutional Narrative: Tokenization and Stablecoins

Ripple’s strategic push into stablecoins and real-world asset (RWA) tokenization represents a structural pivot. 

Stablecoins function as on-chain liquidity infrastructure and integration with XRP Ledger (XRPL) could deepen settlement activity.

Institutional drivers include:

• Cross-border payment corridors

• Tokenized assets and stablecoin issuance

• Integration with banking rails

The ecosystem benefits from XRP as a bridge asset to different parts of the system. 

But development activity does not automatically equate to token price appreciation. The asset needs both transaction volume and liquidity requirements to create sustainable price growth.

Technical and Macro Context

XRP broke above the lower trendline boundary of a falling wedge on Saturday and declined slightly the next day, finding support around it. 

As of Tuesday XRP is trading at $1.47 with 0.65% increase in the last 24 hours. If the lower trendline boundary holds as support it could extend the recovery toward the 50-day Exponential Moving Average (EMA) at $1.73. 

Like Bitcoin and Ethereum, XRP’s momentum indicators (RSI and MACD) also signal a recovery.

On the downside if XRP slips below the lower trendline it could extend the decline toward the weekly support at $1.30.

XRP ETFs also saw renewed inflows of $4.50 million after two days of outflows and it suggests institutional confidence. 

Also Read: XRP Eyes $15: Price May Surge After Breaking Major Resistance

Strategic Bet or Risky Gamble?

XRP is neither purely undervalued nor clearly overvalued right now. It is somehow a leveraged bet on regulatory clarity, institutional adoption and supportive crypto cycle.

We can expect upside in the future if legal issues decrease and tokenization adoption scales. Downside risk will stay if macro conditions tighten or regulatory friction resurfaces.