XRP price faces deeper losses even after Ripple’s banking greenlight
Ripple’s XRP token is trading under heavy pressure, and technical signals point to the possibility of another leg down of around 20%, despite a series of headline‑grabbing fundamental wins for the company.
After topping out near $3.66 in July, XRP has been locked in a persistent downtrend, recently sliding to about $1.98. The move has wiped out a large portion of the summer rally and pushed the token below several key technical levels that traders typically watch as support.
Ripple secures conditional banking charter – why that still may not save XRP
One of the most notable recent developments was the decision by the US Office of the Comptroller of the Currency (OCC) to grant Ripple Labs preliminary, conditional approval for a banking charter for a trust bank.
In its correspondence with Brian Spahn, Ripple’s Senior Director of Compliance, the OCC made clear that this was only an initial greenlight. Full authorization to begin banking operations will only be granted once Ripple’s new entity satisfies every pre‑opening condition set by the regulator. In practice, that means Ripple has a long checklist to complete before the license is fully active.
Even in this conditional form, the charter is strategically important. It opens the door for Ripple to broaden its business model beyond payments software and on‑demand liquidity services. With a banking entity, Ripple can directly offer services such as digital asset custody, trust and treasury products, and tailored solutions for institutional clients.
The company is expected to leverage the new structure to integrate and service businesses it has acquired this year, including GTreasury and Hidden Road. By holding client assets and offering custody in‑house rather than outsourcing to third‑party banks, Ripple can potentially capture new revenue streams and gain greater control over the user experience.
Another likely consequence is that Ripple USD (RLUSD) cash reserves, which are currently held with BNY Mellon, can be migrated to Ripple’s own bank once fully operational. That transition could translate into significant cost savings over time, as the company reduces fees associated with external custody and banking partners.
ETF approvals highlight strong demand – but price action diverges
On the market‑infrastructure side, XRP has also benefited from growing institutional access. The Securities and Exchange Commission has approved multiple XRP‑based exchange‑traded funds (ETFs), including the recently greenlit 21Shares XRP ETF.
These products are designed to make it easier for traditional investors and institutions to gain exposure to XRP without directly managing wallets or on‑chain transactions. So far, they have seen substantial demand: existing XRP ETFs, such as REX‑Osprey’s XXRP, have collectively attracted more than $1 billion in inflows. Notably, they have yet to record a single day of net outflows, underscoring persistent appetite for XRP exposure even during volatile periods.
In parallel, Ripple’s own stable‑value product, Ripple USD, has surpassed $1.3 billion in assets, and private market valuations have placed Ripple around the $40 billion mark. On paper, this blend of robust ETF inflows, growing stablecoin usage, and a high corporate valuation paints a picture of a healthy ecosystem.
Yet the disconnect is striking: while the business metrics look strong, XRP’s market price is rolling over, dragged down by broader crypto‑market weakness and technical selling pressure.
Macro headwinds and sector‑wide sell‑off weigh on XRP
The current decline in XRP is not happening in isolation. The wider digital asset market has been under stress, with many major tokens correcting sharply from their yearly highs. Rising risk aversion, shifting expectations around interest rates, and profit‑taking after a long bull cycle have all contributed to a risk‑off mood.
In such an environment, even positive, token‑specific catalysts can be overwhelmed by macro and sector‑wide factors. Traders who are heavily positioned across multiple cryptocurrencies often reduce exposure across the board, selling winners and losers alike. That dynamic can temporarily mute or even reverse the price impact of bullish news.
For XRP, this means that events which might normally act as strong tailwinds – a banking charter, ETF approvals, growing stablecoin usage – are being overshadowed by generalized selling and technical breakdowns on the charts.
Technical outlook: why a 20% drop remains on the table
From a chart standpoint, XRP’s setup currently favors the bears.
On the daily timeframe, the token remains pinned beneath a descending trendline that has capped price rallies since October 2. Each attempt to break above this line has been rejected, confirming it as a dominant resistance level and reinforcing the pattern of lower highs.
XRP has also slipped below the 50‑day moving average, a widely followed gauge of medium‑term trend direction. Trading under this moving average indicates that momentum has shifted in favor of sellers and that dips are more likely to be sold than bought, at least for now.
In addition, the Supertrend indicator on the daily chart is signaling a bearish phase. This tool, which combines volatility and trend data, has flipped to “sell” and is currently positioned above price, acting as dynamic resistance and discouraging aggressive long entries.
Perhaps most importantly, XRP has lost its foothold at the psychologically and technically significant $2.00 level. This zone previously served as support, but the recent breakdown converts it into a resistance area. Traders who bought near $2 may now look to exit on any bounce back to that region, adding to selling pressure.
Using the Murrey Math Lines tool, analysts identify the next major support level around $1.5625. From current prices, that implies roughly 20% additional downside if bears press their advantage. This level is not just a mathematical construct; it roughly aligns with a zone where historical consolidation and demand previously emerged, making it a logical area for buyers to attempt a defense.
What could invalidate the bearish scenario?
While the probability currently favors continued weakness, no technical setup is guaranteed. Traders watching XRP’s next moves often focus on a few key conditions that could negate or weaken the bearish outlook:
– Reclaiming $2.00 with strong volume. A decisive move back above $2, accompanied by a spike in trading volume, would indicate renewed demand and could turn this level back into support rather than resistance.
– Breaking above the descending trendline. A clean breakout above the downtrend line from the October 2 high, followed by a successful retest, would be an early signal that the medium‑term trend might be shifting in favor of bulls.
– Daily close above the 50‑day moving average. Sustained trading above the 50‑day MA would show that buyers have regained control of the medium‑term narrative.
– Improvement in overall crypto sentiment. A broad recovery across major cryptocurrencies often lifts structurally strong projects like Ripple disproportionately as sidelined capital redeploys.
If some or all of these conditions are met, the call for a drop toward $1.5625 would become less compelling, and traders would likely start discussing higher upside targets again.
How Ripple’s banking license can change the long‑term picture
Even if XRP does experience a further near‑term decline, the conditional banking charter has the potential to be a meaningful long‑term catalyst.
With a trust bank under its umbrella, Ripple can:
– Offer regulated custody and trustee services to institutions that require stringent compliance and risk‑management frameworks.
– Integrate on‑chain liquidity with traditional banking rails more seamlessly, tightening the link between digital assets and fiat flows.
– Design new financial products – structured notes, yield products, or institutional‑grade crypto services – that directly or indirectly rely on XRP liquidity.
– Enhance trust with regulators and large corporate clients by operating within a well‑defined banking regulatory perimeter.
These developments do not guarantee immediate price appreciation, but they strengthen the fundamental case for XRP as a core asset in Ripple’s ecosystem, rather than a peripheral token.
ETF inflows and their delayed impact on price
The strong, consistent inflows into XRP ETFs suggest a base of long‑term holders entering the market via regulated instruments. However, the effect of ETF demand is often uneven over time.
Some reasons why price may not yet fully reflect ETF inflows:
– Hedging and arbitrage. Market makers and institutional participants can hedge ETF exposure in derivatives markets, which can dampen direct spot price impact.
– Offsetting selling pressure. ETF buying might be absorbing selling from early holders or leveraged traders exiting positions, stabilizing price rather than pushing it higher.
– Gradual accumulation. If inflows are steady but not explosive, they can take months to translate into visible price trends, especially during market downturns.
If ETF demand persists while broader market sentiment improves, XRP could see a more pronounced upside response later, even if the short‑term picture remains challenging.
Risk management considerations for XRP traders and investors
For market participants exposed to XRP, the current environment calls for careful risk management rather than emotional decision‑making.
Key considerations include:
– Position sizing. Avoid overexposure to a single token, especially when technicals point to potential downside.
– Clear invalidation levels. Traders may want to define levels at which their bearish or bullish thesis is wrong (for example, a sustained move above or below certain support/resistance lines).
– Time horizon clarity. Long‑term investors focusing on Ripple’s business trajectory might tolerate drawdowns that short‑term traders cannot.
– Diversification across sectors. Balancing XRP exposure with other assets, including non‑crypto investments, can reduce portfolio volatility.
Short‑term pain vs. long‑term thesis
The current setup around XRP is a classic example of how fundamentals and price can temporarily diverge. On the one hand, Ripple is securing regulatory milestones, expanding its product stack, growing RLUSD assets, and seeing strong ETF interest. On the other hand, the chart is signaling caution, with a credible risk of another 20% decline toward the $1.5625 area.
For short‑term traders, the focus will likely remain on technical levels, momentum indicators, and broader market sentiment. For long‑term holders, the more relevant questions may be whether Ripple continues to execute on banking, payment, and institutional‑services strategies that entrench XRP’s role in its ecosystem.
Until the technical picture improves, the market is signaling that, despite the positive headlines, XRP has not yet found a durable bottom – and that a deeper correction remains a real possibility before any sustainable recovery can begin.