The XRP price has recently seen a steep downturn, raising questions across the crypto market. XRP, the digital asset that powers the XRP Ledger, slipped to $2.08 on May 6, 2025—its lowest in two weeks. The ongoing correction has extended over five consecutive days, prompting investors to assess the underlying catalysts behind this drop.
Current technical indications show persistent bearish momentum, which could extend the downturn if support levels fail to hold. A key formation on the daily chart is the descending triangle, a classic bearish pattern with the potential to push the price down to $1.20. XRP is currently hovering around a crucial range between $1.77 and $1.90, levels tested multiple times since late 2024. Should this zone be breached, more significant losses could follow.
According to experts, XRP’s recent pricing behavior diverges from Bitcoin’s patterns, suggesting the asset is driven more by internal developments than by wider market trends. The following five factors contribute most significantly to XRP’s poor momentum in May.
1. Slowing Network Activity and Liquidity Issues
Among the most critical issues affecting XRP is a noticeable drop in daily activity on the XRP Ledger. The number of active users has dropped to about 30,000, which signals diminished transactional volume and weaker liquidity. This has been accompanied by reduced engagement on social platforms, indicating waning retail interest in the asset.
Adding to the negative sentiment is increased selling activity by whale investors. These large holders have been offloading XRP during periods of price strength—a pattern dating back to the last quarter of 2024. This consistent distribution reflects dwindling conviction among heavyweights in the market.
2. Macroeconomic Headwinds Add Pressure
Wider macroeconomic forces have played a substantial role in XRP’s price pressure. Investors are wary ahead of the Federal Open Market Committee’s policy meeting, which could reinforce risk-averse behavior. There is added concern over the upcoming personal consumption expenditures (PCE) measure, the Federal Reserve’s favored inflation metric, as market participants fear persistent inflation or rate hikes.
Additionally, geopolitical trade shocks—like the sweeping tariffs introduced by President Trump on a global scale—have contributed to anxiety across financial markets. China’s retaliatory tariffs have only deepened fears of an economic downturn, dragging the broader crypto landscape with them. XRP was hit particularly hard during the April market correction, declining nearly 45% from $3.20 to $1.80.
3. Traders Take Profits Amid Uncertain Outlook
Another central factor is the increase in profit-taking, as traders locked in gains following XRP’s remarkable rally in Q4 2024. The asset soared from just $0.50 to above $3 early in 2025—a 600% jump that naturally invited significant selling pressure after its peak. Over $1 billion in assets were liquidated in early April alone, predominantly at the $2.10 mark.
This heavy volume on the downside underlines investor caution and suggests that short-term market players are exiting amid macro and technical uncertainties.
4. Regulatory Wins Offset by ETF Delays
While Ripple recently resolved its long-standing legal battle with the SEC via a $50 million settlement, the market response has been subdued. Although it brings significant regulatory clarity, the positive sentiment was likely priced in ahead of the announcement.
Moreover, the absence of spot ETF approvals, particularly delays from regulatory bodies on proposals from firms such as Franklin Templeton and Grayscale, has dampened hopes for institutional inflows. Despite high approval odds, these setbacks contribute to the current lack of momentum in XRP’s market.
5. Ripple’s Strategic Shift Toward RLUSD Raises Doubts
Ripple’s increased focus on its new RLUSD stablecoin has added a layer of uncertainty. Designed to support cross-border finance, RLUSD has been positioned as a complementary asset to XRP. Still, this evolution has stirred concerns among participants who question whether XRP will remain central to Ripple’s long-term strategy.
While RLUSD may enhance the broader protocol utility, it has potentially diverted speculative attention away from XRP, eroding confidence in its price support.
What Could Lead to Recovery?
Despite its current weakness, there are paths that could lift XRP in the medium to long run. Approval of a spot XRP ETF remains the most anticipated catalyst. Some analysts believe the chances of approval are currently above 75%, which could open doors to institutional funding.
At the same time, the ongoing burn of XRP through transactions on the XRPL—which increased by nearly 40% week-over-week—could reduce supply, improving pricing dynamics if demand returns. In the regulatory landscape, recent leadership changes suggest a shift toward more crypto-positive policy, which could further support recovery.
However, unless XRP breaks above key resistance at $2.26, short-term gains are unlikely. Market participants must carefully monitor both technical levels and news developments to reevaluate entry points.
XRP’s trajectory in 2025 remains a blend of challenge and opportunity, reflecting a combination of internal developments and external pressures. While the current cycle is bearish, structural improvements and favorable regulatory outcomes could eventually reverse the trend.
