XRP drifts lower as risk-off sentiment and leverage unwinds keep pressure on prices

​​​XRP drifts lower

​Since the beginning of February, XRP has traded in a markedly more fragile environment, reflecting a combination of macro-driven volatility, shifting institutional engagement and renewed scrutiny of its regulatory and adoption narrative.

​After attempting to stabilise in late January, the token came under renewed pressure as broader cryptocurrency markets turned defensive, exposing how sensitive XRP remains to liquidity conditions and leveraged positioning.

​At the end of January, XRP had been consolidating above key technical support following its earlier correction. Sentiment was cautiously constructive, supported by ongoing discussion around potential spot XRP exchange-traded products and incremental progress in regulatory clarity in certain jurisdictions. Market participants also continued to monitor Ripple’s cross-border payments expansion, particularly in emerging markets, where partnerships with financial institutions remain central to XRP’s long-term use case.

​However, the relative calm proved short-lived. A broader risk-off move across digital assets in early February weighed heavily on high-beta tokens, and XRP was no exception. As expectations around the timing of interest rate cuts became less certain and global bond yields edged higher, investors reduced exposure to speculative assets. Bitcoin and Ether retreated, but XRP -  which historically exhibits sharper directional moves during stress periods - saw disproportionate downside pressure.

​Leverage dynamics amplified the decline. In the days leading up to the sell-off, derivatives data suggested that long exposure had built up again, with traders positioning for a continuation of January’s recovery. When prices slipped below short-term support zones, stop-loss orders were triggered and liquidations accelerated. Funding rates softened, and the forced unwinding of leveraged long positions pushed XRP lower more rapidly than spot selling alone would likely have achieved.

​Institutional flows since the beginning of February have reflected a cautious tone. XRP-linked investment vehicles saw intermittent inflows during brief rebounds, but these were often followed by outflows during renewed volatility. This pattern suggested tactical allocation rather than strong directional conviction. Unlike in previous rallies, there was little evidence of aggressive institutional dip-buying during the sharpest phases of the sell-off, leaving XRP exposed to extended downside moves.

​Beyond price mechanics, ecosystem-specific developments have continued to shape the narrative. Ripple has maintained its focus on expanding its payments infrastructure and promoting XRP as a bridge asset for cross-border settlement. Announcements around ongoing integrations and regional partnerships have supported the longer-term adoption story. Yet these structural developments have not translated into immediate price support, particularly in a market environment dominated by macro uncertainty and liquidity constraints.

​At the same time, speculation around potential spot XRP exchange-traded funds (ETFs) has remained in the background. While no definitive approvals have materialised, continued filings and commentary from asset managers have kept the prospect alive. For many investors, this remains a potential medium-term catalyst. However, in the absence of concrete timelines or regulatory breakthroughs, short-term traders have largely prioritised technical levels and macro indicators over narrative-driven positioning.

​On-chain activity has shown mixed signals. While large wallet movements and periodic accumulation by longer-term holders suggest that some investors are taking advantage of lower prices, overall trading volumes and speculative participation have cooled compared with late-2025 peaks. This moderation reflects a broader recalibration across the crypto market, where liquidity has become more selective and risk appetite more conditional.

​Despite the recent volatility, XRP’s longer-term structural case remains intact for many market participants. Its positioning within cross-border payments infrastructure, combined with ongoing regulatory engagement and institutional dialogue, continues to differentiate it from purely speculative tokens. However, February’s price action underscores that even assets with established narratives remain vulnerable when macro sentiment deteriorates and leverage is forced out of the system.

​Looking ahead, XRP’s near-term direction will likely hinge on broader crypto market stability, clarity around monetary policy expectations and the evolution of institutional flows. A stabilisation in global risk appetite could allow XRP to consolidate and potentially recover, particularly if speculative leverage has been sufficiently reset. Conversely, renewed macro stress or further unwinding of leveraged positions could keep the token under pressure.

​For now, XRP’s performance since the beginning of February illustrates the delicate balance between structural adoption narratives and short-term market mechanics.

​While the long-term story remains compelling to many holders, near-term price action continues to be dictated by liquidity conditions, investor positioning and the broader tone across global financial markets.

​XRP bearish case:

​While XRP remains below its 15 February high at $1.6698 on a daily chart closing basis, downside pressure should retain the upper hand with the mid-February lows around $1.3477 - $1.3425 low being eyed. Further down lies the $1.1188 early February low.

​XRP bullish case:

​If XRP were to see a rise above the late January low and 6 February high at $1.5082 - $1.5406, the 15 February high at $1.6698 may be revisited. Slightly further up lies the 1 February high at $1.6778.

​Short-term outlook:

Neutral with a bearish bias while below the 6 February high at $1.5406.

​Medium-term outlook:

Bearish while below the 15 February high at $1.6698, targeting the $1.3724 - $1.3425 support area.

XRP daily candlestick chart