Why Is XRP Going Down? 5 Reasons Behind the XRP Price Decline in May 2025
By: finance magnates|2025/05/06 11:00:22
XRP, thenative cryptocurrency of the XRP Ledger ( XRPL ), has been on a downward spiral,marking its fifth consecutive session of losses. On Tuesday, May 6, 2025, XRPtested a two-week low of $2.08, down over 7% (approximately 16 cents) in thepast five days, according to TradingView data. This decline has left investors and traderssearching for answers: Why is XRP going down? and why is the XRP price fallingtoday? In this article, we delve into the key factors driving XRP’s recentslump, from technical indicators to macroeconomic pressures, while exploringwhether this bearish trend will persist. XRP Bearish TechnicalPatterns Signal Further Declines The priceof XRP is falling today (Tuesday), hitting an intraday low of $2.08—the lowestlevel in two weeks—as the sell-off that began last week continues. At the timeof writing, XRP is down 1.2%, trading at $2.1041. XRP’s pricecharts are flashing warning signs, with several bearish patterns contributingto the ongoing decline. In my technical analysis, I have identified adescending triangle on the daily chart, a pattern that suggests a potential 45%drop to $1.20 if support levels break. Thesituation is still being supported by a key zone in the $1.77–$1.90 range,defined by lows established since December of last year and repeatedly testedin February, March, and April. If this support zone is broken, it would confirmfor me that XRP could fall toward the $1.20 area. "XRP has been a bellwether of its own ecosystem, more so than one for the overall market," commented Paul Howard, Director at Wincent. "What we will likely see is the asset break away from following BTC. This can be seen in the recent price action in the last 6 months. $XRP tends to be more news and product media-driven narrative than BTC, and therefore a more tactical play for many, based less so on the macro market." But why isthe XRP price falling? Below, I outline what I believe are the five mainreasons. Why Is XRP Price Falling? 5Reasons Declining Network Activityand Liquidity Main factorbehind XRP’s price decline is the significant drop in activity on the XRPLedger. Daily active addresses have plummeted to around 30,000, reflectingreduced transaction volume and liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term . Thisdecline, highlighted by Santiment’s biweekly market update, correlates withlower buying pressure and increased downside risk. Social dominance, a measureof XRP’s discussion relative to other cryptocurrencies, has also waned over thepast three months, signaling fading retail interest. Whaleactivity adds to the bearish narrative. Largeholders have been selling into price strength , a trend that began in Q42024 and persists into May 2025. This distribution, coupled with a divergencebetween earlier price gains and declining institutional support, suggestsweakening conviction among big players. Thecombination of reduced network engagement and whale selling is a key reason whythe XRP price is going down today, as demand struggles to keep pace withsupply. You may also like: How Low Can XRP Go? Expert Predicts XRP Price Could Hit 6-Month Lows MacroeconomicUncertainties Weigh on Crypto Markets The broadercryptocurrency market is under pressure, and XRP is no exception. XRP andCardano’s ADA are sliding as traders brace for the Federal Open MarketCommittee (FOMC) meeting, which could influence monetary policy and marketsentiment. #Bitcoin Short-Term Update #BTC is consolidating between last week’s high and low, awaiting tomorrow’s FOMC meeting and Jerome Powell’s speech. Meanwhile, the daily MACD is crossing bearish, signaling slowing momentum. pic.twitter.com/UKA0Vjj5xB Investorsare particularly focused on the upcoming personal consumption expenditures(PCE) price index for March, the Federal Reserve’s preferred inflation gauge.Fears of persistent inflation or rate hikes are driving risk-off sentimentacross crypto markets. Additionally, PresidentDonald Trump’s broad tariffs on goods from over 100 countries , announced inearly 2025, have sparked concerns about a U.S. economic slowdown. Thesetariffs, coupled with China’s retaliatory measures, contributed to a $1.3trillion crypto market correction in early April, with XRP plummeting nearly45% from $3.20 to $1.80. This macroeconomic backdrop is a significant driver ofwhy XRP is falling, as investors adopt a cautious stance amid globaluncertainties. "A falling Coinbase premium and weak funding rates—suggest momentummay be fading," said Markus Thielen, the CEO of 10x Research. "The Fed remains neutral (meeting on May 7), volatility is creeping back, and uncertainty around tariffs looms. This is not a time for blind risk-taking but tactical positioning withwell-defined exposure." Profit-Taking andIncreased Selling Pressure Hightrading volumes during XRP’s recent declines point to profit-taking andrepositioning by traders. After a 600% rally in Q4 2024, which saw XRP surgefrom $0.50 to over $3 by January 2025, investors have been locking in gains. Inearly April, traders offloaded over $1 billion in positions at an average priceof $2.10, contributing to the current downturn. The surgein volume during price drops is a clear indicator of why XRP is going down, asshort-term traders exit positions amid uncertainty. Regulatory Clarity vs. ETFDelays WhileRipple recently achieved a major regulatory milestone, the market’s responsehas been lukewarm. Rippleconfirmed a $50 million settlement with the SEC , ending a four-year lawsuitand providing clarity on XRP’s status. This resolution, reported in Ripple’slatest XRP Markets Report, removes a significant overhang but has not spurredimmediate price gains, suggesting the news was already priced in. However,delays in spot XRPETF approvals are tempering optimism. Applications from firms like Bitwise,Franklin Templeton, and Grayscale face SEC postponements, with FranklinTempleton’s proposal delayed until June 17. BREAKING: SEC DELAYS DECISION ON FRANKLIN TEMPLETON’S SPOT XRP ETF — NEW DEADLINE JUNE 17 The U.S. Securities and Exchange Commission (SEC) has officially pushed its decision on the Franklin Templeton XRP Spot ETF to June 17, 2025, per a new filing published today. The... pic.twitter.com/inWewJeQVB Despite a65–87% approval probability, the lack of progress is a bearish factor, asinvestors await institutional demand that ETFs could unlock. The recentapproval of ProShares XRP Futures ETFs, set to launch on April 30, 2025, is apositive step, but futures ETFs have less price impact than spot ETFs, limitingtheir ability to counter the current decline. Ripple’s Strategic Shiftto RLUSD Stablecoin Ripple’s pivottoward its RLUSD stablecoin , launched to complement XRP, is another factorcontributing to bearish sentiment. RLUSD is gaining traction as a bridge assetfor cross-border transactions, potentially diverting attention from XRP’s rolein Ripple Ripple Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Read this Term ’s ecosystem. Posts on X suggest that this strategic shift is causinginvestor uncertainty, as some question XRP’s centrality in Ripple’s long-termvision. WhileRLUSD’s success could enhance the XRPL’s utility, it is currently a reason whythe XRP price is going down today, as speculative interest wanes. Will XRP Recover?Potential Catalysts Despitethe current downturn, several factors could spark a recovery: Spot ETF Approvals : Analysts estimate a 77% chance of spot XRP ETF approvals by year-end, which could drive institutional demand and push prices toward $3 or higher. Supply Reduction : A 38% week-over-week increase in burned fees on the XRPL is reducing XRP’s circulating supply, potentially supporting prices if demand rises. Regulatory Tailwinds : The appointment of pro-crypto SEC Chairman Paul Atkins and ongoing settlement talks signal a more favorable regulatory environment, boosting long-term confidence. However,these catalysts are longer-term, and XRP’s immediate outlook remains bearishunless it breaks key resistance levels like $2.26. Conclusion: Why XRP IsFalling and What’s Next XRP’s pricedecline to $2.08 on May 6, 2025, is driven by a confluence of bearish technicalpatterns, declining network activity, macroeconomic uncertainties,profit-taking, regulatory delays, and Ripple’s RLUSD pivot. While recentdevelopments like the SEC settlement and XRPL upgrades offer hope, they areovershadowed by short-term market pressures. Investorswondering why XRP is going down should monitor support levels at $2.08 and$1.89, as a break below could signal further declines. Conversely, a breakoutabove $2.26 or positive ETF news could ignite a recovery. As the crypto marketnavigates FOMC outcomes and global economic shifts, XRP’s path forward remainsuncertain but not without potential. XRP News, FAQ: AddressingCommon Questions About XRP’s Price Drop What is the reason forXRP’s drop? XRP’s dropis driven by bearish technical patterns (e.g., descending triangle, inverse cupand handle), declining network activity (30,000 daily active addresses),macroeconomic fears (e.g., Trump’s tariffs, FOMC uncertainty), profit-takingafter a Q4 2024 rally, and delays in spot ETF approvals. Ripple’s focus onRLUSD also contributes to bearish sentiment. Will XRP ever go up again? Yes, XRPhas potential to recover, driven by catalysts like spot ETF approvals (77%probability by year-end), XRPL’s burned fees reducing supply, and a pro-cryptoregulatory shift under SEC Chairman Paul Atkins. However, short-term declinesmay persist unless resistance at $2.26 is broken. What is happening withXRP? XRP isexperiencing a five-session decline, hitting $2.08 on May 6, 2025, down 7% infive days. Bearish factors include technical breakdowns, reduced networkactivity, and macroeconomic pressures. Ripple’s recent updates, like the SECsettlement and “Deep Freeze” feature, are positive but haven’t counteredmarket-wide selling. Will XRP drop again in2025? XRP coulddrop further in 2025 if support at $2.08 or $1.89 fails, with analyststargeting $1.20 in a worst-case scenario. Macroeconomic uncertainties and ETFdelays increase downside risk. However, bullish catalysts like ETF approvals orincreased XRPL adoption could limit declines and spur a rebound. XRP, thenative cryptocurrency of the XRP Ledger ( XRPL ), has been on a downward spiral,marking its fifth consecutive session of losses. On Tuesday, May 6, 2025, XRPtested a two-week low of $2.08, down over 7% (approximately 16 cents) in thepast five days, according to TradingView data. This decline has left investors and traderssearching for answers: Why is XRP going down? and why is the XRP price fallingtoday? In this article, we delve into the key factors driving XRP’s recentslump, from technical indicators to macroeconomic pressures, while exploringwhether this bearish trend will persist. XRP Bearish TechnicalPatterns Signal Further Declines The priceof XRP is falling today (Tuesday), hitting an intraday low of $2.08—the lowestlevel in two weeks—as the sell-off that began last week continues. At the timeof writing, XRP is down 1.2%, trading at $2.1041. XRP’s pricecharts are flashing warning signs, with several bearish patterns contributingto the ongoing decline. In my technical analysis, I have identified adescending triangle on the daily chart, a pattern that suggests a potential 45%drop to $1.20 if support levels break. Thesituation is still being supported by a key zone in the $1.77–$1.90 range,defined by lows established since December of last year and repeatedly testedin February, March, and April. If this support zone is broken, it would confirmfor me that XRP could fall toward the $1.20 area. "XRP has been a bellwether of its own ecosystem, more so than one for the overall market," commented Paul Howard, Director at Wincent. "What we will likely see is the asset break away from following BTC. This can be seen in the recent price action in the last 6 months. $XRP tends to be more news and product media-driven narrative than BTC, and therefore a more tactical play for many, based less so on the macro market." But why isthe XRP price falling? Below, I outline what I believe are the five mainreasons. Why Is XRP Price Falling? 5Reasons Declining Network Activityand Liquidity Main factorbehind XRP’s price decline is the significant drop in activity on the XRPLedger. Daily active addresses have plummeted to around 30,000, reflectingreduced transaction volume and liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term . Thisdecline, highlighted by Santiment’s biweekly market update, correlates withlower buying pressure and increased downside risk. Social dominance, a measureof XRP’s discussion relative to other cryptocurrencies, has also waned over thepast three months, signaling fading retail interest. Whaleactivity adds to the bearish narrative. Largeholders have been selling into price strength , a trend that began in Q42024 and persists into May 2025. This distribution, coupled with a divergencebetween earlier price gains and declining institutional support, suggestsweakening conviction among big players. Thecombination of reduced network engagement and whale selling is a key reason whythe XRP price is going down today, as demand struggles to keep pace withsupply. You may also like: How Low Can XRP Go? Expert Predicts XRP Price Could Hit 6-Month Lows MacroeconomicUncertainties Weigh on Crypto Markets The broadercryptocurrency market is under pressure, and XRP is no exception. XRP andCardano’s ADA are sliding as traders brace for the Federal Open MarketCommittee (FOMC) meeting, which could influence monetary policy and marketsentiment. #Bitcoin Short-Term Update #BTC is consolidating between last week’s high and low, awaiting tomorrow’s FOMC meeting and Jerome Powell’s speech. Meanwhile, the daily MACD is crossing bearish, signaling slowing momentum. pic.twitter.com/UKA0Vjj5xB Investorsare particularly focused on the upcoming personal consumption expenditures(PCE) price index for March, the Federal Reserve’s preferred inflation gauge.Fears of persistent inflation or rate hikes are driving risk-off sentimentacross crypto markets. Additionally, PresidentDonald Trump’s broad tariffs on goods from over 100 countries , announced inearly 2025, have sparked concerns about a U.S. economic slowdown. Thesetariffs, coupled with China’s retaliatory measures, contributed to a $1.3trillion crypto market correction in early April, with XRP plummeting nearly45% from $3.20 to $1.80. This macroeconomic backdrop is a significant driver ofwhy XRP is falling, as investors adopt a cautious stance amid globaluncertainties. "A falling Coinbase premium and weak funding rates—suggest momentummay be fading," said Markus Thielen, the CEO of 10x Research. "The Fed remains neutral (meeting on May 7), volatility is creeping back, and uncertainty around tariffs looms. This is not a time for blind risk-taking but tactical positioning withwell-defined exposure." Profit-Taking andIncreased Selling Pressure Hightrading volumes during XRP’s recent declines point to profit-taking andrepositioning by traders. After a 600% rally in Q4 2024, which saw XRP surgefrom $0.50 to over $3 by January 2025, investors have been locking in gains. Inearly April, traders offloaded over $1 billion in positions at an average priceof $2.10, contributing to the current downturn. The surgein volume during price drops is a clear indicator of why XRP is going down, asshort-term traders exit positions amid uncertainty. Regulatory Clarity vs. ETFDelays WhileRipple recently achieved a major regulatory milestone, the market’s responsehas been lukewarm. Rippleconfirmed a $50 million settlement with the SEC , ending a four-year lawsuitand providing clarity on XRP’s status. This resolution, reported in Ripple’slatest XRP Markets Report, removes a significant overhang but has not spurredimmediate price gains, suggesting the news was already priced in. However,delays in spot XRPETF approvals are tempering optimism. Applications from firms like Bitwise,Franklin Templeton, and Grayscale face SEC postponements, with FranklinTempleton’s proposal delayed until June 17. BREAKING: SEC DELAYS DECISION ON FRANKLIN TEMPLETON’S SPOT XRP ETF — NEW DEADLINE JUNE 17 The U.S. Securities and Exchange Commission (SEC) has officially pushed its decision on the Franklin Templeton XRP Spot ETF to June 17, 2025, per a new filing published today. The... pic.twitter.com/inWewJeQVB Despite a65–87% approval probability, the lack of progress is a bearish factor, asinvestors await institutional demand that ETFs could unlock. The recentapproval of ProShares XRP Futures ETFs, set to launch on April 30, 2025, is apositive step, but futures ETFs have less price impact than spot ETFs, limitingtheir ability to counter the current decline. Ripple’s Strategic Shiftto RLUSD Stablecoin Ripple’s pivottoward its RLUSD stablecoin , launched to complement XRP, is another factorcontributing to bearish sentiment. RLUSD is gaining traction as a bridge assetfor cross-border transactions, potentially diverting attention from XRP’s rolein Ripple Ripple Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Read this Term ’s ecosystem. Posts on X suggest that this strategic shift is causinginvestor uncertainty, as some question XRP’s centrality in Ripple’s long-termvision. WhileRLUSD’s success could enhance the XRPL’s utility, it is currently a reason whythe XRP price is going down today, as speculative interest wanes. Will XRP Recover?Potential Catalysts Despitethe current downturn, several factors could spark a recovery: Spot ETF Approvals : Analysts estimate a 77% chance of spot XRP ETF approvals by year-end, which could drive institutional demand and push prices toward $3 or higher. Supply Reduction : A 38% week-over-week increase in burned fees on the XRPL is reducing XRP’s circulating supply, potentially supporting prices if demand rises. Regulatory Tailwinds : The appointment of pro-crypto SEC Chairman Paul Atkins and ongoing settlement talks signal a more favorable regulatory environment, boosting long-term confidence. However,these catalysts are longer-term, and XRP’s immediate outlook remains bearishunless it breaks key resistance levels like $2.26. Conclusion: Why XRP IsFalling and What’s Next XRP’s pricedecline to $2.08 on May 6, 2025, is driven by a confluence of bearish technicalpatterns, declining network activity, macroeconomic uncertainties,profit-taking, regulatory delays, and Ripple’s RLUSD pivot. While recentdevelopments like the SEC settlement and XRPL upgrades offer hope, they areovershadowed by short-term market pressures. Investorswondering why XRP is going down should monitor support levels at $2.08 and$1.89, as a break below could signal further declines. Conversely, a breakoutabove $2.26 or positive ETF news could ignite a recovery. As the crypto marketnavigates FOMC outcomes and global economic shifts, XRP’s path forward remainsuncertain but not without potential. XRP News, FAQ: AddressingCommon Questions About XRP’s Price Drop What is the reason forXRP’s drop? XRP’s dropis driven by bearish technical patterns (e.g., descending triangle, inverse cupand handle), declining network activity (30,000 daily active addresses),macroeconomic fears (e.g., Trump’s tariffs, FOMC uncertainty), profit-takingafter a Q4 2024 rally, and delays in spot ETF approvals. Ripple’s focus onRLUSD also contributes to bearish sentiment. Will XRP ever go up again? Yes, XRPhas potential to recover, driven by catalysts like spot ETF approvals (77%probability by year-end), XRPL’s burned fees reducing supply, and a pro-cryptoregulatory shift under SEC Chairman Paul Atkins. However, short-term declinesmay persist unless resistance at $2.26 is broken. What is happening withXRP? XRP isexperiencing a five-session decline, hitting $2.08 on May 6, 2025, down 7% infive days. Bearish factors include technical breakdowns, reduced networkactivity, and macroeconomic pressures. Ripple’s recent updates, like the SECsettlement and “Deep Freeze” feature, are positive but haven’t counteredmarket-wide selling. Will XRP drop again in2025? XRP coulddrop further in 2025 if support at $2.08 or $1.89 fails, with analyststargeting $1.20 in a worst-case scenario. Macroeconomic uncertainties and ETFdelays increase downside risk. However, bullish catalysts like ETF approvals orincreased XRPL adoption could limit declines and spur a rebound.
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