Why is XRP down | A 2026 Market Analysis

Recent Price Performance Breakdown

As of February 1, 2026, XRP has experienced a notable downturn, dropping approximately 7% within the last 24 hours. This decline is part of a broader trend of weakness that has seen the token lose about 5% of its value over the past month. While the asset reached highs above $3.00 during the 2025 market cycle, it is currently trading around the $1.66 to $1.75 range. This shift reflects a significant cooling off from previous bullish momentum.

The technical breakdown became evident when XRP slid from $1.88, failing to maintain support at the critical $1.79 level. This breach triggered a liquidation cascade, leading to a sharp surge in trading volume as sell orders were executed. Market analysts observe that the current price is roughly 50% below the July 2025 cycle high of $3.65, suggesting that the market is undergoing a period of deep correction and consolidation.

Key Factors Driving Downward Pressure

Post-Settlement Profit Taking

One of the primary reasons for the current price suppression is large-scale profit-taking. Following the final settlement agreement between Ripple Labs and the U.S. Securities and Exchange Commission (SEC), many long-term holders who had anticipated regulatory clarity decided to realize their gains. This "sell the news" event created a massive supply of XRP on the market, which has struggled to find enough immediate buy-side liquidity to maintain higher price levels.

Capital Rotation to Majors

In the current 2026 market environment, institutional and retail capital has shown a tendency to rotate out of altcoins and back into established leaders like Bitcoin and Ethereum. Even with the introduction of XRP ETFs and significant inflows—totaling approximately $1.3 billion since November 2025—the demand has not been sufficient to offset the capital moving toward other assets. This rotation often occurs when investors seek perceived stability during periods of market-wide volatility.

Failed Support and Liquidations

Technical factors have played a major role in the recent 7% slide. When the price broke below the $1.79 support level, it triggered automated sell-offs and forced liquidations for traders holding leveraged long positions. This "liquidation cascade" accelerated the downward move, pushing the price toward the $1.73 and $1.66 marks. Such movements often create a feedback loop where falling prices trigger more selling, leading to the rapid drops observed in the last 24 hours.

Market Sentiment and Social Data

Current sentiment indicators for XRP have entered a zone of "extreme fear." Social data suggests that smaller, retail traders have largely stepped aside, with online discussions turning heavily bearish. This lack of retail participation means there is less "dip-buying" activity to support the price during sell-offs. Historically, when sentiment reaches these lows, it can signal a potential bottom, but in the short term, it reflects a lack of confidence among the general trading public.

Interestingly, while smaller traders are exiting, on-chain data shows that "millionaire wallets"—those holding large amounts of XRP—have actually been increasing their positions. This divergence between retail fear and institutional accumulation is a common feature of mature crypto markets. For those looking to manage their holdings or explore new positions, the WEEX registration link provides access to a platform designed for secure digital asset management.

Institutional Developments and Stablecoins

The Role of RLUSD

Ripple has continued to expand its ecosystem despite the price volatility of XRP. The launch and listing of Ripple USD (RLUSD) on major platforms like Binance have been pivotal. RLUSD is being integrated as core collateral across various global marketplaces to improve cross-border payment efficiency. While this strengthens the Ripple ecosystem, the immediate impact on the XRP price has been muted as the market adjusts to the presence of a native stablecoin alongside the XRP utility token.

Strategic Investments and Growth

In late 2025, Ripple announced a $500 million strategic investment led by major firms like Fortress and Citadel Securities, valuing the company at $40 billion. This investment highlights the long-term institutional interest in Ripple’s infrastructure. However, corporate valuation and token price do not always move in tandem. The market is currently weighing these long-term fundamental strengths against short-term liquidity needs and macroeconomic pressures.

Comparing Market Expectations

The following table summarizes the differences between the bullish projections made in mid-2025 and the current market reality as of February 2026.

Metric	2025 Peak/Projection	Current Status (Feb 2026)
Price Level	$3.65 (July 2025 High)	$1.66 - $1.75
Market Sentiment	High Optimism / ETF Hype	Extreme Fear / Bearish Chatter
ETF Inflows	Anticipated High Demand	$1.3B (Below expectations)
Support Levels	$2.10 - $3.00	$1.79 (Broken)

Future Outlook for 2026

AI Price Predictions

Despite the current sell-off, some AI-driven models suggest a potential rebound. Predictions for the end of February 2026 indicate that XRP could reclaim the $2.00 level if market sentiment stabilizes and the broader crypto market resumes its upward trajectory. These models base their optimism on the historical tendency of XRP to undergo sharp recoveries after periods of extreme fear and heavy liquidation.

Regulatory and Utility Milestones

The path forward for XRP is heavily tied to its utility in institutional finance. With preliminary regulatory approvals in jurisdictions like Luxembourg and the UK, Ripple is scaling its payment infrastructure across Europe. As these systems move from pilot programs to full-scale institutional utility, the demand for XRP as a bridge asset may see a fundamental shift. For traders interested in these movements, monitoring the WEEX spot trading market can provide insights into how XRP pairs are performing against major benchmarks like Bitcoin.

Risk Factors to Watch

Investors should remain cautious of the "inflow structure" risk. Even with ETF optimism, if the broader market remains weak, XRP may continue to test lower support levels. The current holder structure resembles patterns seen in early 2022, which preceded a prolonged period of sideways or downward movement. Monitoring volume and social sentiment will be key to determining whether the current dip is a temporary correction or the start of a longer bearish phase.