Despite a series of high-profile developments surrounding Ripple and its ecosystem, the price of XRP has seen a notable decline this week. While many expected bullish momentum to follow significant news, the market responded in the opposite direction. Here’s a closer look at the factors contributing to XRP’s retreat, despite seemingly positive headlines.
Ripple made headlines after securing a massive $500 million investment from Citadel and Fortress Investment Group. This substantial funding round values Ripple at approximately $40 billion, effectively doubling the valuation of Circle, the company behind the USDC stablecoin. This positions Ripple as one of the largest players in the crypto industry. However, despite the impressive capital influx, XRP failed to capitalize on this momentum.
Another major development came from Ripple’s stablecoin, RLUSD, which reached a significant milestone. For the first time since its launch nearly a year ago, RLUSD exceeded $1 billion in market capitalization. This achievement places it as the third-largest stablecoin compliant with the GENIUS Act, trailing only USDC and PayPal USD. Still, even this growth in Ripple’s stablecoin ecosystem couldn’t lift investor sentiment around XRP.
Moreover, Ripple’s strategic partnership with Mastercard, WebBank, and Gemini made headlines. The collaboration aims to enable fiat credit card payments using RLUSD settled on the XRP Ledger, starting with the Gemini XRP Credit Card. Considering Mastercard’s status as the world’s second-largest payment processor, the deal is expected to enhance XRP’s real-world use cases. Yet, this forward-looking initiative hasn’t translated into immediate price appreciation for the token.
Adding to the optimism was a regulatory development: Bitwise filed a key document with the U.S. Securities and Exchange Commission (SEC), a move widely interpreted as preparation to launch an XRP-based exchange-traded fund (ETF). If approved, this ETF would join the REX-Osprey XRP Fund, which currently manages over $112 million in assets. Despite the potential for increased institutional exposure, XRP’s price remains under pressure.
The overarching reason for XRP’s drop lies in the broader downturn affecting the cryptocurrency market. Both Bitcoin and Ethereum saw declines this week, dragging the rest of the market down with them. While a few altcoins like Zcash, Internet Computer (ICP), and Dash managed to post gains, the majority, including XRP, faced sell-offs.
Another key factor is XRP’s negative weighted funding rate. A consistently negative funding rate suggests that traders are betting on lower prices in the future and are willing to pay a premium to hold short positions. This bearish sentiment has been reinforced by a sharp drop in open interest, which now stands at $3.5 billion, down from over $10 billion in August. The decline in open interest suggests that many investors are opting to stay out of the market rather than take new positions.
From a technical analysis perspective, XRP has been trapped in a steady downtrend over the past few months, forming a descending channel on the daily chart. It continues to trade below its 100-day Exponential Moving Average (EMA), a key indicator often used to gauge medium-term price momentum. This confirms that bears currently control the market direction.
However, there are glimmers of hope on the chart. XRP has formed a double-bottom pattern near the $2.1656 level, with a neckline around $2.60. This classical reversal pattern could signal a potential breakout to the upside if the price manages to surpass the neckline, possibly targeting the upper boundary of the descending channel at around $2.65.
Beyond immediate price movements, XRP is also facing psychological resistance due to macroeconomic uncertainty. Investors remain cautious amid concerns about interest rates, inflation, and regulatory scrutiny, particularly in the U.S. crypto sector. These broader variables continue to weigh on market confidence, prompting many to adopt a risk-off posture even when individual projects show positive progress.
Furthermore, XRP has historically been highly reactive to sentiment shifts in the crypto community. Despite Ripple’s achievements, lingering skepticism from retail and institutional investors alike—especially following its long-standing legal battle with the SEC—continues to affect price dynamics. Although Ripple has achieved partial legal victories, the case’s unresolved status keeps some players hesitant.
Another consideration is the lack of immediate utility and traction for RLUSD despite its growth. While the stablecoin has crossed the billion-dollar mark, its real-world usage is still in early stages. For XRP to see sustained price growth, broader adoption of RLUSD and its integration into payment ecosystems would need to accelerate.
Additionally, competition in the stablecoin and blockchain payment space is intensifying. Projects like Solana, Avalanche, and Ethereum Layer 2 networks are rapidly expanding, offering faster speeds and lower fees. These developments may be drawing developer attention and liquidity away from the XRP Ledger.
Looking ahead, XRP’s price action will likely depend on several converging factors: broader market recovery, further adoption of RLUSD, clarity on ETF approvals, and the outcome of Ripple’s regulatory engagements. If these align favorably, XRP could see a resurgence. Until then, volatility and cautious sentiment may continue to define its short-term trajectory.