The price of XRP has fallen below $2 to the price level last seen in April as selling pressure increases in both derivatives and spot markets.
According to CryptoSlate Data shows the Ripple-linked token fell about 6% over the past day to around $1.87, continuing a pullback that has followed broader weakness in Bitcoin and Ethereum.
Notably, this negative price trend has overshadowed key milestones that would typically create bullish momentum for the digital asset.
For context, Ripple recently received conditional approval from the Office of the Comptroller of the currency (OCC), putting it on a regulatory footing similar to that of leading financial institutions. At the same time, Swiss-regulated AMINA Bank went live with Ripple’s licensed payment product, enabling cross-border transfers in near real-time.
Beyond banking, Ripple and its XRP ecosystem are expanding into other blockchain networks.
The company’s $1.3 billion RLUSD stablecoin has expanded support to major Ethereum Layer-2 networks including Optimism, Base, and Kraken’s Ink. At the same time, custodian Hex Trust is launching wXRP on Ethereum, Solana and HyperEVM, opening the way for XRP to enter broader DeFi markets beyond its own ledger.
Interestingly, XRP’s price decline has also defied a record streak of institutional demand. Since launching in November, the US-listed spot XRP ETFs have recorded 22 consecutive days of net buying, accumulating more than $1 billion in assets and inflows.
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This disconnect forces a critical question: “Why is XRP declining despite its fundamental wins?”
The answer lies in three overlapping factors: massive profit-taking by early investors, a systemic decline in debt levels, and a deep contraction in liquidity. Together, these shifts show that the market is moving from speculation to balance sheet recovery.
Long-term holders cash in
The most immediate source of downward pressure is aggressive distribution by early cohorts who accumulated XRP at prices well below current levels.
For example, a nearly seven-year-old XRP wallet that accumulated the token at around $0.40 realized a gain of more than $721.5 million on December 11, around the $2.00 level.
The selling came just as momentum was stalling, amplifying rather than absorbing resistance.
Meanwhile on a chain facts from Glassnode confirms that this was not an isolated transaction. Profit realization has accelerated since early autumn, with realized profits up around 240% since September.
As a result, daily realized profits have increased from about $65 million to almost $220 million, even when spot price trends are lower.
This marks a change in behavior. In previous cycles, long-term holders have typically been divided by strength.
However, the current pattern indicates a desire for balance sheet protection, with early entrants selling their products into a vulnerable market.
This has left recent buyers of XRP largely underwater. So there is little natural demand to absorb this supply, resulting in a heavy tape with each round of selling pushing prices to new lows.
Winding down of the market
At the same time, the XRP derivatives market is moving away from high leverage.
Facts from CryptoQuant shows that Binance’s estimated leverage ratio for XRP has fallen to around 0.18, one of the lowest values for the current period and a sharp reset from levels seen during the rally above $3.
A declining ELR means that more of the open interest is now covered by collateral rather than borrowed money, which usually reflects the closing or reduction of leveraged positions.
This type of deleveraging often follows volatile swings or sharp liquidations, as traders tighten risk and clear marginal positions. For XRP, the move corresponds to the October 10 shock and the subsequent period of choppy price action.
Structurally, lower leverage reduces vulnerability because fewer positions can be forced out by sudden price spikes.
That lowers the chance of cascade liquidations, which is common during parabolic rallies in altcoins. In the short term, however, this also means less speculative fuel on the long side.
With fewer traders willing to take on leverage exposure and long-term holders already realizing profits, the path of least resistance for prices has been lower as the market looks for a new equilibrium.
If liquidity eventually returns to derivatives under these low-leverage conditions, any future upward movement could unfold in a more orderly manner. For now, the data describes a market that is still rebalancing and has not yet defined the next big trend.
Liquidity is draining from altcoins
Finally, the current crypto market structure completes the bearish picture.
XRP’s weakness manifests itself amid shrinking volumes within the altcoin complex and a renewed concentration of liquidity in Bitcoin.
This shift is clearly visible on Binance, which remains the deepest venue for XRP trading.
According to data from CryptoQuant, Taker Buy Volume in XRP futures, a metric that tracks aggressive buying orders, has fallen from a July peak above $5.8 billion to around $250 million. This represents a collapse of 95.7% in active purchases, showing how much demand has fallen.
For almost the entire period, the Taker Buy Sell Ratio has remained negative, indicating that sell orders consistently outweigh buys in the derivative order book.
Furthermore, the broader altcoin markets also continue to live in the shadow of Bitcoin’s liquidity pull. As investors crowd into the largest crypto asset, less capital circulates through the rest of the market.
That dynamic has been amplified by repeated waves of liquidations and continued caution following the October 10 event, which has left many traders wary of adding new risk.
In these types of environments, phases of volume compression often end with a return of volatility, but the current configuration offers little cushion to XRP.
With XRP buying interest low and derivatives flow moving to the sell side, a deeper correction cannot be ruled out if another macro or market shock occurs.