Full Analysis: Why XRP Price Fell Below $2 Despite ETF Approval!

The XRP price has fallen below the critical $2.00 psychological level, retesting lows last seen in June and October. This sharp decline, occurring on the day of the Bitwise XRP ETF launch, highlights a significant disconnect between strong institutional excitement and immediate market performance.

I. Primary Reasons for the Price Decline

The drop was not due to the ETF itself but was driven by macro factors and market dynamics: Bitcoin-Led Market Crash (Macro Pressure): The main catalyst was a broader bearish shift in the crypto market, led by Bitcoin’s crash below the $87,000 level, which triggered the liquidation of over $220 million in long positions across the market, pulling XRP down with it.Market Misunderstanding of ETF Flow: The decline is linked to a mismatch in expectations. Retail traders rushed in early, anticipating instant price surges upon the ETF launch (FOMO). In contrast, institutions are expected to purchase XRP slowly on dips over time for their funds, meaning the immediate massive buying pressure that retail expected did not materialize.

II. On-Chain Data Confirms Selling Pressure

Despite the initial frenzy around the ETF, on-chain activity reveals strong selling that exacerbated the price drop: Whale Distribution: Reports indicate that large holders (whales) contributed significantly to the selling, dumping around 200 million XRP within 48 hours of the ETF launch.Fragile Market Structure: The share of XRP supply currently in profit has fallen to 58.5% (the lowest since November 2024). This means 41.5% of the total supply, approximately 26.5 billion XRP, now sits at a loss. This figure signifies a “top-heavy” and structurally fragile market dominated by late buyers who are now underwater and contributing to the selling.

III. Key Resistance and Outlook

The $2.00 level, which served as a major psychological floor, has now failed and becomes the immediate key resistance. Short-Term Outlook: The short-term trend is bearish, as the price is struggling to recover above $2.00. The market must stabilize from the macro crash and the persistent whale selling before any reversal can gain traction.Long-Term Outlook: Analysts suggest that the real positive impact of the XRP ETF, driven by sustained institutional accumulation, may take time to materialize, potentially not being fully felt until 2026. While the Bitwise XRP ETF saw a strong day-one trading volume of $22 million, this institutional flow is a slow, steady process rather than an immediate price pump.

⚠️ Important Disclaimer

This analysis is for informational and educational purposes only and is based on technical analysis and market data. It is not financial advice, nor should it be construed as a recommendation to buy, sell, or hold any security or cryptocurrency. The cryptocurrency market is highly speculative, volatile, and subject to external factors. Readers must conduct their own comprehensive research (DYOR) and consult with a qualified financial advisor before making any investment decisions.