Why is XRP going down : A 2026 Market Analysis

Recent Price Performance

As of early February 2026, XRP has faced significant downward pressure, reflecting a broader trend of weakness within the digital asset market. Over the past 24 hours, the token has seen a price decrease of approximately 7%, contributing to a monthly decline of roughly 5%. This recent volatility is part of a more extended "brutal rough stretch" where the asset has lost nearly 30% of its value over the last three months.

Technical indicators currently point toward a bearish short-term trend. On the four-hour charts, the 50-day moving average is falling, which suggests that the momentum remains in favor of sellers. Market analysts have identified critical support levels that investors are watching closely. Specifically, a sustained move below the $1.46 mark could trigger accelerated selling, potentially exposing the asset to deeper declines toward the $1.24 range. This technical headwind is a primary driver behind the current price retreat.

Market Liquidity Shifts

One of the most notable events impacting the market recently was a record-breaking outflow from XRP Exchange-Traded Funds (ETFs). On January 29, 2026, data indicated a massive $92.9 million drop in ETF holdings. This significant reduction in institutional exposure coincided with a broader market crash, amplifying the downward trajectory of the token's price. When large-scale investment vehicles see such rapid outflows, it often creates a feedback loop that discourages retail participation and increases sell-side pressure.

Despite these outflows, there is a curious divergence in wallet behavior. While the price has dropped by 4% in the opening weeks of 2026, the number of "millionaire wallets"—those holding significant amounts of the token—has actually been increasing. This suggests that while short-term traders and ETF participants are exiting, long-term whales may be using the price dip to accumulate more assets, signaling a complex tug-of-war between immediate market sentiment and long-term investor confidence.

Impact of Escrow

The programmatic release of tokens from escrow remains a fundamental factor in the asset's supply-and-demand dynamics. Following its long-standing schedule, Ripple is prepared to unlock 1 billion tokens from its escrow wallets on February 1, 2026. These monthly unlocks are designed to provide predictability to the ecosystem, but they also represent a consistent increase in circulating supply.

When a large volume of tokens enters the market during a period of low demand or general market weakness, it can act as a ceiling on price appreciation. Traders often anticipate these unlocks, leading to preemptive selling or a lack of buying interest around the first of each month. The current decline is partially attributed to the market absorbing this fresh supply amidst an already fragile macroeconomic environment for cryptocurrencies.

Technical and Regulatory

The early 2026 narrative for XRP is a blend of regulatory breakthroughs and technical challenges. While the legal landscape has become much clearer compared to previous years, the market is currently navigating "technical headwinds." The following table summarizes the key factors influencing the price action as of February 2026:

Factor	Impact on Price	Current Status (Feb 2026)
ETF Outflows	Negative	Record $92.9M drop on Jan 29
Escrow Unlock	Neutral/Negative	1 Billion tokens released Feb 1
Moving Averages	Negative	50-day MA is currently falling
Whale Accumulation	Positive	Millionaire wallets are increasing

In addition to these factors, the XRP Ledger is undergoing structural updates. The Token Escrow amendment has gained over 82% consensus and is set for activation on February 12, 2026. While these technical improvements are healthy for the long-term utility of the network, they often introduce short-term uncertainty as the community and node operators prepare for the transition.

Trading and Strategy

For those looking to navigate this volatility, understanding the difference between spot and derivative markets is essential. Traders who prefer to hold the underlying asset during these price dips often utilize spot markets. For instance, those monitoring the market might look at the WEEX spot trading platform to gauge how major assets like Bitcoin are influencing the broader altcoin sentiment. Conversely, those looking to hedge their positions or speculate on further downward movement often turn to futures contracts.

The current market trend indicates increasing pressure, with the token dropping about 7% in a single day recently. This high volatility makes risk management a priority. Many participants are using the WEEX futures trading interface to set stop-loss orders or take-profit levels to protect their capital against sudden swings. If the price continues to struggle below the $1.50 psychological barrier, the market may see further liquidations of long positions, which could drive the price down even further before a stable bottom is found.

Future Ecosystem Outlook

Despite the current "brutal" stretch, the ecosystem is preparing for several high-profile events that could shift sentiment. Ripple is hosting global Community Day sessions on February 11–12, 2026, to outline priorities for the remainder of the year. These priorities are expected to focus on regulated finance and the expansion of wrapped assets on the ledger. For new users entering the space during this period of price discovery, the WEEX registration link provides a straightforward way to access the markets and monitor these developments in real-time.

The divergence between falling prices and rising millionaire wallets suggests that the current downturn might be a "shakeout" of speculative hands rather than a loss of fundamental value. However, until the asset can reclaim its short-term moving averages and stabilize above key support levels like $1.46, the path of least resistance appears to be downward. Investors are currently weighing the impact of the 1 billion token unlock against the potential for positive news from the upcoming Community Day sessions.