XRP has fallen below the $2 level, a psychologically important threshold, as broader market conditions continue to deteriorate and selling pressure weighs on risky assets. While Bitcoin dominates liquidity and investor attention, altcoins struggle to attract sustained demand, and XRP increasingly reflects this imbalance.
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According to a CryptoQuant report from Darkfost, the weakness in XRP is not an isolated event, but part of a broader contraction in the altcoin market. Trading activity has declined significantly in both spot markets and derivatives in recent months. Liquidity is gradually drying up, signaling a clear retreat from speculative positioning as investors reduce exposure to higher-risk assets.
This trend is especially visible in XRP derivatives data. Taker Buy Volume on Binance, which aggressively tracks buying orders on futures markets, has collapsed to the lowest level of the year. After peaking above $5.8 billion in July, this value has fallen to roughly $250 million, a sharp decline of 95.7%.
Such a dramatic contraction highlights the near-total evaporation of buying pressure and underlines the lack of conviction among traders.
XRP liquidity compression indicates downside risk
According to Darkfost, the broader market context is a major factor reinforcing XRP’s current weakness. Liquidations in the crypto markets are piling up, trust remains fragile and many participants are still psychologically affected by the October 10 event. This ongoing stress has reduced risk tolerance, especially among short-term traders who typically provide liquidity during correction phases.
Sentiment aside, altcoins face clear structural headwinds. Bitcoin continues to absorb the majority of available capital in both spot and derivatives markets. As BTC’s dominance remains high, liquidity that would normally turn into altcoins during recovery remains concentrated in Bitcoin instead. This leaves very limited room for a sustained recovery in the broader altcoin market, including XRP.
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Within this environment, the sharp collapse in XRP’s Taker Buy Volume is not surprising. The signal becomes even more relevant as it unfolds on Binance, which still accounts for the majority of global XRP trading activity. A continued decline in aggressive buying on the dominant exchange underlines the depth of demand erosion.
At the same time, the Taker is Buy Sell Ratio has remained negative for most of the period, confirming that sellers continue to dominate the XRP derivatives market. Historically, such severe volume compression can precede expansions in volatility.
However, in the current environment, the lack of meaningful buying pressure and continued bearish positioning indicate that downside risks remain high. Even ETF-related optimism has failed to offset these structural weaknesses.
XRP price is struggling below the major moving averages
XRP price action on the 3-day chart reflects a clear loss of bullish structure and increasing downward pressure. After peaking above the $3.40-$3.60 zone earlier this year, XRP has formed a series of lower highs and lower lows, confirming a medium-term downward trend. The recent collapse below the psychological level of $2.00 is particularly significant, as this zone previously acted as both support and consolidation.
From a technical perspective, XRP is now trading below the 50 and 100 day moving averages, both of which are starting to trend lower. This alignment reinforces bearish momentum and suggests that rallies are selling rather than accumulating. The 200-day moving average, currently around $1.70-$1.80, represents the next major structural support. A continued move towards this level would not be surprising if selling pressure continues.
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The volume dynamics further confirm the weakness. Since peaking in August, volume has been steadily declining, indicating declining participation and weak interest in dip buying. The sharp volatility spike in October was followed by distribution rather than continuation, often a sign of a local market top.
As long as XRP remains below $2.00 and fails to reclaim the declining moving averages, the path of least resistance remains downward. For any meaningful trend reversal, XRP would need to regain $2.30-$2.50 on growing volume, signaling renewed demand rather than short-term relief rallies.
Featured image of ChatGPT, chart from TradingView.com