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.

XRP Bearish Technical Patterns Signal Further Declines

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.

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.

“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.

Why Is XRP Price Falling? 5 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 Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term.

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.

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.

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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.

#Bitcoin Short-Term Update 💥#BTC is consolidating between last week’s high and low, awaiting tomorrow’s FOMC meeting and Jerome Powell’s speech.

Meanwhile, the daily MACD is crossing bearish, signaling slowing momentum. pic.twitter.com/UKA0Vjj5xB

— Titan of Crypto (@Washigorira) May 6, 2025

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.

“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.

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.

🚨BREAKING: SEC DELAYS DECISION ON FRANKLIN TEMPLETON’S SPOT XRP ETF — NEW DEADLINE JUNE 17 🧨👀

The U.S. Securities and Exchange Commission (SEC) has officially pushed its decision on the Franklin Templeton XRP Spot ETF to June 17, 2025, per a new filing published today. The… pic.twitter.com/inWewJeQVB

— Diana (@InvestWithD) April 29, 2025

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 Ripple Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Ripple was co-founded by Jed McCaleb and Chris Larsen and was debuted in 2012 as both a digital disbursement network and a pre-mined digital coin denoted as XRP. Possessing less market cap than both Bitcoin and Ethereum, Ripple ranks as the third-largest cryptocurrency.Its dual open-source and peer-to-peer (P2P) decentralized platform whose network is capable of working with any form of money such as GBP, Ethereum, Yen, etc. What is Ripple Used For? Known as a gateway, participants of Ripple may Read this Term’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.