XRP is under significant pressure as a confluence of regulatory delays, geopolitical unrest, and deteriorating on-chain metrics fuel a sharp market correction. The XRP Ledger’s Total Value Locked (TVL) has plummeted by 12.5% to $54.2 million, signaling weakening confidence in the network’s decentralized finance ecosystem. At the same time, open interest in XRP derivatives has dropped nearly 36%, with funding rates turning negative—clear indicators of bearish sentiment among traders.
Technically, XRP is forming troubling patterns: a descending triangle and a “death cross,” where the 50-day moving average falls below the 200-day. These formations often precede extended downtrends. While XRP has rebounded slightly to $2.02—up 3.34%—this recovery remains fragile. Analysts warn that without strong support above $2, the token could slide toward $1.47 or even below $1 in a worst-case scenario.
ETF Approval Delay Shakes Investor Confidence
One of the primary catalysts behind the selloff is the U.S. Securities and Exchange Commission’s (SEC) decision to delay its ruling on the Franklin Templeton spot XRP ETF. This postponement marks another hurdle in XRP’s path toward institutional adoption, dashing hopes for near-term regulatory clarity.
The ETF delay arrives amid heightened macro uncertainty. Rising geopolitical tensions in the Middle East have triggered a broad risk-off sentiment across financial markets. Bitcoin and major altcoins followed XRP into decline as investors moved capital into safer assets.
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XRP had previously gained momentum following Ripple’s legal victories against the SEC, sparking optimism about future ETF approvals. However, this latest setback has eroded short-term bullish momentum. The combination of stalled institutional progress and global instability has left traders cautious.
On-Chain Data Reveals Network Weakness
Beyond price action, on-chain metrics paint a concerning picture of declining network activity.
Total Value Locked (TVL) on the XRP Ledger has dropped to $54.2 million—a 12.5% decline that reflects reduced participation in decentralized applications and liquidity pools. Compared to other Layer 1 blockchains maintaining stable or growing TVL under similar market conditions, XRP’s drop raises questions about its long-term utility and developer engagement.
Open interest in XRP futures has also collapsed by 36%, suggesting traders are closing leveraged positions and exiting the market. Negative funding rates further confirm that shorts now dominate the market, expecting further downside.
These indicators align with bearish technical patterns:
- Descending Triangle: A consolidation pattern with lower highs and a flat support base, typically resolved by a breakdown.
- Death Cross: The 50-day MA crossing below the 200-day MA, historically associated with prolonged bear markets.
Together, they suggest that unless strong buying pressure emerges, XRP may face continued downward pressure.
Key Support Levels and Downside Targets
Technical analyst EGRAG Crypto highlights that the $2.10–$2.09 range previously acted as strong support, coinciding with the 200-day moving average. However, repeated rejections at this level have weakened its reliability.
If XRP fails to sustain above $2, the next demand zone lies between $1.90 and $1.77. A break below this range could accelerate selling, targeting $1.47—a level tied to previous swing lows.
In an extreme scenario, panic selling could push XRP below $1, especially if broader market conditions worsen or negative regulatory news resurfaces.
That said, today’s bounce to $2.02 offers a glimmer of hope. Should volume increase and holding patterns stabilize, this level might serve as a temporary floor.
Bullish Case: ETF Hopes and Market Resilience
Despite the bearish outlook, there are still reasons for optimism.
XRP recently staged a V-shaped recovery from $1.91 to reclaim $2, supported by approximately $4 billion in futures trading volume. This rebound suggests underlying demand persists at lower price levels.
Well-known trader CasiTrades argues that successfully defending $2 could open the door to a rally toward $3—especially if macroeconomic conditions improve and trading volume remains strong.
Moreover, event prediction platform Polymarket currently assigns over 80% probability to a spot XRP ETF approval before year-end. If realized, this could act as a powerful bullish catalyst, reigniting institutional interest and driving capital inflows.
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With sentiment hanging in the balance, every price action around $2 becomes critical. A sustained breakout above $2.10 could signal renewed strength, while failure may confirm bearish dominance.
What’s Next for XRP? Monitoring Key Triggers
XRP stands at a pivotal juncture. The path forward hinges on three core factors:
- Regulatory Clarity: Any progress on ETF applications or favorable SEC rulings could instantly boost sentiment.
- Technical Resilience: Holding above $2 is essential to prevent deeper losses.
- Macro Environment: Geopolitical stability and risk appetite will influence broader crypto market flows.
Traders should closely monitor:
- SEC announcements related to crypto ETFs
- On-chain activity such as TVL and exchange flows
- Price behavior at key psychological and technical levels ($2, $1.77, $1.47)
Frequently Asked Questions (FAQ)
Q: Why did XRP TVL drop by 12.5%?
A: The decline in Total Value Locked reflects reduced participation in XRP Ledger-based DeFi protocols, likely due to falling investor confidence amid regulatory delays and market-wide risk aversion.
Q: What does a death cross mean for XRP?
A: A death cross occurs when the 50-day moving average falls below the 200-day average, often signaling the start of a prolonged downtrend. For XRP, it reinforces bearish momentum unless reversed quickly.
Q: Is an XRP ETF still possible in 2025?
A: Yes. Despite recent delays, prediction markets like Polymarket show over 80% odds of a spot XRP ETF approval in 2025, making it a key catalyst to watch.
Q: Can XRP recover if it holds above $2?
A: Holding above $2 increases the chances of stabilization. With strong volume and positive news, a move toward $2.30–$2.33 becomes feasible.
Q: What happens if XRP breaks below $2?
A: A confirmed breakdown could trigger stop-loss cascades, pushing price toward $1.90–$1.77 initially, then potentially testing $1.47 or lower.
Q: How do funding rates affect XRP price?
A: Negative funding rates indicate that short positions dominate the futures market, suggesting traders expect further declines—a headwind for price recovery.
XRP’s journey in 2025 will be shaped by both technical momentum and external forces beyond its control. While current data leans bearish, the potential for regulatory breakthroughs keeps long-term optimism alive.
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