Regulation

Why Is XRP Going Down? 5 Reasons Behind the XRP Price Decline in May 2025

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XRP, the
native cryptocurrency of the XRP Ledger (XRPL), has been on a downward spiral,
marking its fifth consecutive session of losses. On Tuesday, May 6, 2025, XRP
tested a two-week low of $2.08, down over 7% (approximately 16 cents) in the
past five days, according to TradingView data.

This decline has left investors and traders
searching for answers: Why is XRP going down? and why is the XRP price falling
today? In this article, we delve into the key factors driving XRP’s recent
slump, from technical indicators to macroeconomic pressures, while exploring
whether this bearish trend will persist.

The price
of XRP is falling today (Tuesday), hitting an intraday low of $2.08—the lowest
level in two weeks—as the sell-off that began last week continues. At the time
of writing, XRP is down 1.2%, trading at $2.1041.

XRP’s price
charts are flashing warning signs, with several bearish patterns contributing
to the ongoing decline. In my technical analysis, I have identified a
descending triangle on the daily chart, a pattern that suggests a potential 45%
drop to $1.20 if support levels break.

Descending triangle on the XRP daily price chart. Source: Tradingview.com

The
situation 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 tested
in February, March, and April. If this support zone is broken, it would confirm
for me that XRP could fall toward the $1.20 area.

Paul Howard, Wincent

“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 is
the XRP price falling? Below, I outline what I believe are the five main
reasons.

Declining Network Activity
and Liquidity

Main factor
behind XRP’s price decline is the significant drop in activity on the XRP
Ledger. Daily active addresses have plummeted to around 30,000, reflecting
reduced transaction volume and liquidity .

This
decline, highlighted by Santiment’s biweekly market update, correlates with
lower buying pressure and increased downside risk. Social dominance, a measure
of XRP’s discussion relative to other cryptocurrencies, has also waned over the
past three months, signaling fading retail interest.

Declining activity of XRP Ledger. Source: XRPScan.com

Whale
activity adds to the bearish narrative. Large
holders have been selling into price strength, a trend that began in Q4
2024 and persists into May 2025. This distribution, coupled with a divergence
between earlier price gains and declining institutional support, suggests
weakening conviction among big players.

The
combination of reduced network engagement and whale selling is a key reason why
the XRP price is going down today, as demand struggles to keep pace with
supply.

You may also like: How Low Can XRP Go? Expert Predicts XRP Price Could Hit 6-Month Lows

Macroeconomic
Uncertainties Weigh on Crypto Markets

The broader
cryptocurrency market is under pressure, and XRP is no exception. XRP and
Cardano’s ADA are sliding as traders brace for the Federal Open Market
Committee (FOMC) meeting, which could influence monetary policy and market
sentiment.

Investors
are 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 sentiment
across crypto markets.

Additionally,
President
Donald Trump’s broad tariffs on goods from over 100 countries, announced in
early 2025, have sparked concerns about a U.S. economic slowdown. These
tariffs, coupled with China’s retaliatory measures, contributed to a $1.3
trillion crypto market correction in early April, with XRP plummeting nearly
45% from $3.20 to $1.80. This macroeconomic backdrop is a significant driver of
why XRP is falling, as investors adopt a cautious stance amid global
uncertainties.

Markus Thielen, the CEO of 10x Research.

“A falling Coinbase premium and weak funding rates—suggest momentum
may 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 with
well-defined exposure.”

Profit-Taking and
Increased Selling Pressure

High
trading volumes during XRP’s recent declines point to profit-taking and
repositioning by traders. After a 600% rally in Q4 2024, which saw XRP surge
from $0.50 to over $3 by January 2025, investors have been locking in gains. In
early April, traders offloaded over $1 billion in positions at an average price
of $2.10, contributing to the current downturn.

XRP total liquidations chart. Source: CoinGlass.com

The surge
in volume during price drops is a clear indicator of why XRP is going down, as
short-term traders exit positions amid uncertainty.

Regulatory Clarity vs. ETF
Delays

While
Ripple recently achieved a major regulatory milestone, the market’s response
has been lukewarm. Ripple
confirmed a $50 million settlement with the SEC, ending a four-year lawsuit
and providing clarity on XRP’s status. This resolution, reported in Ripple’s
latest XRP Markets Report, removes a significant overhang but has not spurred
immediate price gains, suggesting the news was already priced in.

However,
delays in spot XRP
ETF approvals are tempering optimism. Applications from firms like Bitwise,
Franklin Templeton, and Grayscale face SEC postponements, with Franklin
Templeton’s proposal delayed until June 17.

Despite a
65–87% approval probability, the lack of progress is a bearish factor, as
investors await institutional demand that ETFs could unlock. The recent
approval of ProShares XRP Futures ETFs, set to launch on April 30, 2025, is a
positive step, but futures ETFs have less price impact than spot ETFs, limiting
their ability to counter the current decline.

Ripple’s Strategic Shift
to RLUSD Stablecoin

Ripple’s pivot
toward its RLUSD stablecoin, launched to complement XRP, is another factor
contributing to bearish sentiment. RLUSD is gaining traction as a bridge asset
for cross-border transactions, potentially diverting attention from XRP’s role
in Ripple ’s ecosystem. Posts on X suggest that this strategic shift is causing
investor uncertainty, as some question XRP’s centrality in Ripple’s long-term
vision.

While
RLUSD’s success could enhance the XRPL’s utility, it is currently a reason why
the XRP price is going down today, as speculative interest wanes.

Will XRP Recover?
Potential Catalysts

Despite
the 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 bearish
unless it breaks key resistance levels like $2.26.

Conclusion: Why XRP Is
Falling and What’s Next

XRP’s price
decline to $2.08 on May 6, 2025, is driven by a confluence of bearish technical
patterns, declining network activity, macroeconomic uncertainties,
profit-taking, regulatory delays, and Ripple’s RLUSD pivot. While recent
developments like the SEC settlement and XRPL upgrades offer hope, they are
overshadowed by short-term market pressures.

Investors
wondering 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 breakout
above $2.26 or positive ETF news could ignite a recovery. As the crypto market
navigates FOMC outcomes and global economic shifts, XRP’s path forward remains
uncertain but not without potential.

XRP News, FAQ: Addressing
Common Questions About XRP’s Price Drop

What is the reason for
XRP’s drop?

XRP’s drop
is driven by bearish technical patterns (e.g., descending triangle, inverse cup
and handle), declining network activity (30,000 daily active addresses),
macroeconomic fears (e.g., Trump’s tariffs, FOMC uncertainty), profit-taking
after a Q4 2024 rally, and delays in spot ETF approvals. Ripple’s focus on
RLUSD also contributes to bearish sentiment.

Will XRP ever go up again?

Yes, XRP
has potential to recover, driven by catalysts like spot ETF approvals (77%
probability by year-end), XRPL’s burned fees reducing supply, and a pro-crypto
regulatory shift under SEC Chairman Paul Atkins. However, short-term declines
may persist unless resistance at $2.26 is broken.

What is happening with
XRP?

XRP is
experiencing a five-session decline, hitting $2.08 on May 6, 2025, down 7% in
five days. Bearish factors include technical breakdowns, reduced network
activity, and macroeconomic pressures. Ripple’s recent updates, like the SEC
settlement and “Deep Freeze” feature, are positive but haven’t countered
market-wide selling.

Will XRP drop again in
2025?

XRP could
drop further in 2025 if support at $2.08 or $1.89 fails, with analysts
targeting $1.20 in a worst-case scenario. Macroeconomic uncertainties and ETF
delays increase downside risk. However, bullish catalysts like ETF approvals or
increased XRPL adoption could limit declines and spur a rebound.

XRP, the
native cryptocurrency of the XRP Ledger (XRPL), has been on a downward spiral,
marking its fifth consecutive session of losses. On Tuesday, May 6, 2025, XRP
tested a two-week low of $2.08, down over 7% (approximately 16 cents) in the
past five days, according to TradingView data.

This decline has left investors and traders
searching for answers: Why is XRP going down? and why is the XRP price falling
today? In this article, we delve into the key factors driving XRP’s recent
slump, from technical indicators to macroeconomic pressures, while exploring
whether this bearish trend will persist.

The price
of XRP is falling today (Tuesday), hitting an intraday low of $2.08—the lowest
level in two weeks—as the sell-off that began last week continues. At the time
of writing, XRP is down 1.2%, trading at $2.1041.

XRP’s price
charts are flashing warning signs, with several bearish patterns contributing
to the ongoing decline. In my technical analysis, I have identified a
descending triangle on the daily chart, a pattern that suggests a potential 45%
drop to $1.20 if support levels break.

Descending triangle on the XRP daily price chart. Source: Tradingview.com

The
situation 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 tested
in February, March, and April. If this support zone is broken, it would confirm
for me that XRP could fall toward the $1.20 area.

Paul Howard, Wincent

“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 is
the XRP price falling? Below, I outline what I believe are the five main
reasons.

Declining Network Activity
and Liquidity

Main factor
behind XRP’s price decline is the significant drop in activity on the XRP
Ledger. Daily active addresses have plummeted to around 30,000, reflecting
reduced transaction volume and liquidity .

This
decline, highlighted by Santiment’s biweekly market update, correlates with
lower buying pressure and increased downside risk. Social dominance, a measure
of XRP’s discussion relative to other cryptocurrencies, has also waned over the
past three months, signaling fading retail interest.

Declining activity of XRP Ledger. Source: XRPScan.com

Whale
activity adds to the bearish narrative. Large
holders have been selling into price strength, a trend that began in Q4
2024 and persists into May 2025. This distribution, coupled with a divergence
between earlier price gains and declining institutional support, suggests
weakening conviction among big players.

The
combination of reduced network engagement and whale selling is a key reason why
the XRP price is going down today, as demand struggles to keep pace with
supply.

You may also like: How Low Can XRP Go? Expert Predicts XRP Price Could Hit 6-Month Lows

Macroeconomic
Uncertainties Weigh on Crypto Markets

The broader
cryptocurrency market is under pressure, and XRP is no exception. XRP and
Cardano’s ADA are sliding as traders brace for the Federal Open Market
Committee (FOMC) meeting, which could influence monetary policy and market
sentiment.

Investors
are 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 sentiment
across crypto markets.

Additionally,
President
Donald Trump’s broad tariffs on goods from over 100 countries, announced in
early 2025, have sparked concerns about a U.S. economic slowdown. These
tariffs, coupled with China’s retaliatory measures, contributed to a $1.3
trillion crypto market correction in early April, with XRP plummeting nearly
45% from $3.20 to $1.80. This macroeconomic backdrop is a significant driver of
why XRP is falling, as investors adopt a cautious stance amid global
uncertainties.

Markus Thielen, the CEO of 10x Research.

“A falling Coinbase premium and weak funding rates—suggest momentum
may 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 with
well-defined exposure.”

Profit-Taking and
Increased Selling Pressure

High
trading volumes during XRP’s recent declines point to profit-taking and
repositioning by traders. After a 600% rally in Q4 2024, which saw XRP surge
from $0.50 to over $3 by January 2025, investors have been locking in gains. In
early April, traders offloaded over $1 billion in positions at an average price
of $2.10, contributing to the current downturn.

XRP total liquidations chart. Source: CoinGlass.com

The surge
in volume during price drops is a clear indicator of why XRP is going down, as
short-term traders exit positions amid uncertainty.

Regulatory Clarity vs. ETF
Delays

While
Ripple recently achieved a major regulatory milestone, the market’s response
has been lukewarm. Ripple
confirmed a $50 million settlement with the SEC, ending a four-year lawsuit
and providing clarity on XRP’s status. This resolution, reported in Ripple’s
latest XRP Markets Report, removes a significant overhang but has not spurred
immediate price gains, suggesting the news was already priced in.

However,
delays in spot XRP
ETF approvals are tempering optimism. Applications from firms like Bitwise,
Franklin Templeton, and Grayscale face SEC postponements, with Franklin
Templeton’s proposal delayed until June 17.

Despite a
65–87% approval probability, the lack of progress is a bearish factor, as
investors await institutional demand that ETFs could unlock. The recent
approval of ProShares XRP Futures ETFs, set to launch on April 30, 2025, is a
positive step, but futures ETFs have less price impact than spot ETFs, limiting
their ability to counter the current decline.

Ripple’s Strategic Shift
to RLUSD Stablecoin

Ripple’s pivot
toward its RLUSD stablecoin, launched to complement XRP, is another factor
contributing to bearish sentiment. RLUSD is gaining traction as a bridge asset
for cross-border transactions, potentially diverting attention from XRP’s role
in Ripple ’s ecosystem. Posts on X suggest that this strategic shift is causing
investor uncertainty, as some question XRP’s centrality in Ripple’s long-term
vision.

While
RLUSD’s success could enhance the XRPL’s utility, it is currently a reason why
the XRP price is going down today, as speculative interest wanes.

Will XRP Recover?
Potential Catalysts

Despite
the 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 bearish
unless it breaks key resistance levels like $2.26.

Conclusion: Why XRP Is
Falling and What’s Next

XRP’s price
decline to $2.08 on May 6, 2025, is driven by a confluence of bearish technical
patterns, declining network activity, macroeconomic uncertainties,
profit-taking, regulatory delays, and Ripple’s RLUSD pivot. While recent
developments like the SEC settlement and XRPL upgrades offer hope, they are
overshadowed by short-term market pressures.

Investors
wondering 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 breakout
above $2.26 or positive ETF news could ignite a recovery. As the crypto market
navigates FOMC outcomes and global economic shifts, XRP’s path forward remains
uncertain but not without potential.

XRP News, FAQ: Addressing
Common Questions About XRP’s Price Drop

What is the reason for
XRP’s drop?

XRP’s drop
is driven by bearish technical patterns (e.g., descending triangle, inverse cup
and handle), declining network activity (30,000 daily active addresses),
macroeconomic fears (e.g., Trump’s tariffs, FOMC uncertainty), profit-taking
after a Q4 2024 rally, and delays in spot ETF approvals. Ripple’s focus on
RLUSD also contributes to bearish sentiment.

Will XRP ever go up again?

Yes, XRP
has potential to recover, driven by catalysts like spot ETF approvals (77%
probability by year-end), XRPL’s burned fees reducing supply, and a pro-crypto
regulatory shift under SEC Chairman Paul Atkins. However, short-term declines
may persist unless resistance at $2.26 is broken.

What is happening with
XRP?

XRP is
experiencing a five-session decline, hitting $2.08 on May 6, 2025, down 7% in
five days. Bearish factors include technical breakdowns, reduced network
activity, and macroeconomic pressures. Ripple’s recent updates, like the SEC
settlement and “Deep Freeze” feature, are positive but haven’t countered
market-wide selling.

Will XRP drop again in
2025?

XRP could
drop further in 2025 if support at $2.08 or $1.89 fails, with analysts
targeting $1.20 in a worst-case scenario. Macroeconomic uncertainties and ETF
delays increase downside risk. However, bullish catalysts like ETF approvals or
increased XRPL adoption could limit declines and spur a rebound.



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