China Liquidity Boost Lifts XRP Sentiment as Traders Watch $2.05

China is back in easing mode and traders are paying attention. In January, the People’s Bank of China (PBOC) stepped up liquidity support to keep money flowing in the banking system. On January 15 alone the central bank injected a net 300 billion yuan through reverse repo operations. Earlier in the month, it also rolled over more than 1.1 trillion yuan. Also, carried out large scale funding moves worth close to 2 trillion yuan in total.

💥BREAKING:

🇨🇳 China injected ¥1.85 trillion in liquidity this week.

Bullish for markets. pic.twitter.com/aIlZTS2sIn

— Crypto Rover (@cryptorover) January 17, 2026

The goal is simple. China wants to support banks and credit growth after a weak 2025, when new loans hit a seven year low. For markets more liquidity usually means more risk taking and that is exactly how many traders are reading the move. Across social media, traders called the move “bullish for markets.” Some even described the reported 1.85 trillion yuan injection as a clear risk-on signal for stocks and crypto.

Why China’s Liquidity Matters for Crypto

China officially bans crypto trading at home. But global markets still react to Chinese money policy. When China adds liquidity, it often lifts risk appetite across Asia and beyond. That can help stocks, commodities and sometimes crypto.

More liquidity means more capital searching for returns. Even if Chinese money does not directly buy crypto, global investors tend to feel more confident when major economies turn supportive. This time traders are linking the PBOC’s easing to renewed optimism in digital assets. Bitcoin held firm near $95K. Altcoins also found fresh bids and XRP quickly became one of the main focus points.

XRP Traders Turn Bullish Near $2.05 Support

XRP price traded around $2.06-$2.07 as China’s liquidity news spread. The token recently broke above the key $2.00 level. Which many traders see as an important psychological zone. Now all eyes are on the $2.05 support level. Bulls want to see XRP hold above it. If it does, many believe a new rally could start.

XRP Bulls are about to PRINT.

Imagine being bearish here 🫵😂 pic.twitter.com/r09tnWOBVJ

— Gordon 🐂 (@GordonGekko) January 17, 2026

On social media, some traders are already calling for explosive moves. A few even threw out wild long term targets like $12 or $30. That kind of hype is common during strong momentum phases. Still, not everyone is convinced. XRP price slipped around 4% on the day due to broader market weakness. That shows sentiment is improving but price action is still fragile.

Liquidity, Momentum and Market Reality

History shows that China’s liquidity moves do not always lead to instant crypto rallies. Often, new money stays in bonds or domestic stocks but the psychological impact is powerful. For traders, liquidity is fuel. When central banks add it, risk assets usually perform better over time. That is why many see the PBOC’s actions as supportive for crypto in early 2026.

XRP price already had strong momentum earlier this month. Daily transactions crossed 1.4 million. The token jumped more than 25% in January before the recent pullback. Now, traders are watching to see if liquidity support and improving sentiment can push XRP price higher again.

What Comes Next for XRP?

In the short term $2.05 is the level to watch. If XRP holds above it bulls may try to push toward $2.30 and $2.50. A clean break could open the door to even higher levels later this year. But risks remain. Crypto markets are still volatile. Global macro news can quickly change direction and China’s liquidity may not flow into risk assets as fast as traders hope. Currently, sentiments are improving. China is easing, so does liquidity and XRP traders are once again dreaming big. Whether the market delivers is the real test.