Why Is XRP Down Today? Key Factors Behind the Price Decline

XRP, the digital asset associated with Ripple, is experiencing a downturn, prompting many investors and enthusiasts to ask, “Why is XRP down today?” Several factors are contributing to this price decline, ranging from market dynamics to broader economic conditions. This comprehensive report synthesizes the latest information from reputable sources to provide a clear and factual explanation for XRP’s current performance.

Bearish Derivatives Markets and Waning Institutional Demand

One significant reason behind the question “why is XRP down today” is the bearish sentiment in the derivatives markets. Recent data indicates that funding rates for XRP futures have remained neutral since February, suggesting a lack of strong bullish momentum. Additionally, open interest in XRP futures has decreased significantly, dropping to $3.2 billion, a 9.6% decline from $3.52 billion on May 13. This reduction in open interest reflects lower market participation and liquidity, which can lead to increased volatility and downward pressure on XRP’s price.

Compounding this issue is a notable decline in institutional demand. XRP exchange-traded products (ETPs) have recorded their largest weekly outflow in history, amounting to $37.2 million, breaking an 80-week streak of inflows. Month-to-date outflows stand at $28.6 million, signaling a shift in institutional investor sentiment away from XRP.

Declining Network Activity and Macroeconomic Uncertainties

Another factor answering “why is XRP down today” is the decline in network activity and broader macroeconomic pressures. Daily active addresses on the XRP network have dropped to approximately 30,000, with reduced transaction volumes leading to lower buying pressure and increased downside risk. This trend has been exacerbated by a persistent whale selling trend that began in Q4 2024 and continues into May 2025. Additionally, XRP’s social dominance has waned over the past three months, indicating reduced community engagement.

Macroeconomic uncertainties are also playing a significant role. The broader cryptocurrency market is under pressure due to concerns over the upcoming Federal Open Market Committee (FOMC) meeting and the Personal Consumption Expenditures (PCE) price index for March, which could signal inflation and potential interest rate hikes. Earlier in 2025, President Trump’s tariffs on over 100 countries triggered a $1.3 trillion correction in the crypto market, with XRP plummeting 45% from $3.20 to $1.80.

Profit-Taking and Regulatory Delays

Profit-taking following a significant rally is another reason behind XRP’s decline. In Q4 2024, XRP experienced a remarkable 600% increase, rising from $0.50 to over $3 by January 2025. However, this was followed by substantial selling pressure, with $1 billion in positions offloaded at $2.10 in early April. This profit-taking has contributed to the current downward trend.

Regulatory developments have also added to the uncertainty. While Ripple settled with the SEC for $50 million, the market response was lukewarm, failing to provide the expected boost to XRP’s price. Furthermore, decisions on spot XRP exchange-traded funds (ETFs) have been delayed, with Franklin Templeton’s proposal pushed to June 17, 2025, despite a 65–87% approval probability. Although ProShares launched XRP Futures ETFs on April 30, 2025, the overall regulatory environment remains a concern for investors.

Competition from a Wall Street-Backed Stablecoin

A more recent development that might explain “why is XRP down today” is the announcement of a potential Wall Street-backed stablecoin. Major banks, including JPMorgan, Bank of America, Citigroup, and Wells Fargo, are reportedly exploring a joint USD-backed stablecoin, which could directly compete with Ripple’s RLUSD stablecoin. Launched in March 2025, RLUSD has a market cap of $310 million, but the prospect of losing market share to a Wall Street-backed alternative has raised concerns among investors, potentially diverting attention and investment away from XRP.

Ripple’s Strategic Shift to RLUSD

Ripple’s increasing focus on its RLUSD stablecoin may also be contributing to XRP’s price decline. As RLUSD gains traction, particularly among institutional clients, it could be diverting attention from XRP, causing investor uncertainty about the digital asset’s role in Ripple’s ecosystem. This strategic shift is another factor investors are considering when evaluating XRP’s current performance.

Current Market Performance

As of May 29, 2025, XRP is trading at approximately $2.10, down 1.2% from yesterday and 7% over the past five days. Trading volume has surged by 51.84% to $6.97 billion, indicating heightened market activity. However, open interest has decreased by 1.47% to $4.89 billion, with $14.88 million in long liquidations in the last 24 hours, reflecting bearish sentiment.

Metric	Value
Current Price	$2.10
24-Hour Change	-1.2%
5-Day Change	-7%
Trading Volume	$6.97 billion (+51.84%)
Open Interest	$4.89 billion (-1.47%)
Long Liquidations (24h)	$14.88 million

Technical Outlook

Technical analysis reveals a bearish outlook for XRP, with the formation of a descending triangle pattern, a classic bearish reversal indicator. XRP is currently trading below its 9-day ($2.3697) and 21-day ($2.3556) moving averages, with the Relative Strength Index (RSI) at 48.46, suggesting neutral to bearish momentum. Key support levels to watch are at $2.08 and $1.89, with resistance at $2.26. If open interest falls further to $4.5 billion, XRP could test support levels at $2.20 and $2.10. However, if XRP holds above $2.20 and open interest reclaims $5 billion, there may be potential for a recovery toward $2.45.

Potential for Recovery

Despite the current bearish sentiment, there are scenarios where XRP could recover. If XRP maintains support above $2.20 and open interest increases to $5 billion, it could target $2.45. Additionally, positive developments in the regulatory landscape, such as approval of spot XRP ETFs, could boost investor confidence. However, the competitive pressure from a potential Wall Street-backed stablecoin and ongoing macroeconomic uncertainties may continue to challenge XRP’s price in the near term.

Quick Summary,

The question “why is XRP down today” can be attributed to a combination of factors, including bearish derivatives markets, waning institutional demand, declining network activity, macroeconomic uncertainties, profit-taking, regulatory delays, Ripple’s strategic shift to RLUSD, and competition from a potential Wall Street-backed stablecoin. While the current outlook is bearish, investors should monitor key support levels and market developments closely, as these could determine XRP’s short-term trajectory.