The XRP price has moved from being one of the fourth quarter’s best-performing cryptocurrencies into a top laggard in 2025. Ripple has dropped from $3.42 in January this year to $2.2 as most cryptocurrencies dropped. This article explores whether the XRP price will recover after hitting the crucial support at $1.96 last week.
XRP crashes despite crucial good news
The ongoing XRP crash happened even though Ripple experienced some important good news.
First, the XRP price plunge happened as the odds of a spot Ripple ETF jumped. Several companies like 21Shares, Canary, and Grayscale have all applied for a spot XRP ETF after seeing its popularity soar in the past few months.
There is a likelihood that the Securities and Exchange Commission (SEC) will approve the fund, a few months after it allowed the listings of a spot Ethereum fund. An XRP ETF approval will be a positive thing, albeit in the short term, as it will lead to more inflows.
Second, XRP price has crashed as the XRP Ledger network sees some growth. It has started to witness more developer interest in the past few months. Some of the top tokens on the XRP Ledger network are Ripple USD (RLUSD), Sologenic, Crypto Trading Fund, Coreum, and XRP Army.
The Crypto Trading Fund or CTF token price has soared by almost 20% in the last 7 days, while the RLUSD market cap jumped to $132 million. Its daily trading volume is usually more than $100 million, a sign that it has more demand.
Third, there are rising odds that the SEC will end the litigation against Ripple Labs soon. It filed an appeal last year after Ripple secured a partial victory. This case stems in a 2020 lawsuit in which the SEC accused Ripple of selling unregistered securities.
The overseeing judge said that XRP was not a security, but the company’s practice of selling the tokens to institutions was not right. She ordered Ripple to pay a $250 million fine, much lower than the $2 billion that the SEC wanted.
The rising odds that the SEC will drop the Ripple charges are because of its recent decision to drop charges against other companies in the crypto industry like Gemini, Uniswap, and Coinbase.
Read more: Coinbase says SEC set to drop enforcement case against the crypto exchange
Why Ripple price crashed
Therefore, there are three main reasons why the XRP price has crashed despite the good news in its ecosystem. First, XRP has plunged because of the ongoing softness in the crypto industry. Bitcoin and most altcoins have plunged this year, with the market cap of all coins falling to $2.7 trillion.
Second, Ripple has crashed because of the ongoing state of fear in the crypto industry. The fear and greed index has moved to the extreme fear zone of 18. Crypto investors often remain in the sidelines when there is a sense of fear in the market.
XRP price technical analysis
The XRP price has also plunged for technical reasons. For example, the coin has moved from the markup phase of the Wyckoff Theory into the distribution phase. This phase is characterized by investor pull and push and a lack of clear direction.
Additionally, XRP has formed a head and shoulders chart pattern, a popular bearish sign in the market. This pattern comprises of a head, two shoulders, and a neckline. It has moved below the 50-day moving average. Therefore, the XRP price will likely continue falling as sellers target the 61.8% retracement level at $1.6215.
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