XRP, one of the most widely recognized altcoins, is experiencing another downturn in its price trajectory. Currently trading at $2.20, XRP has dropped by 2.40% over the past 24 hours. With a market capitalization of approximately $129.41 billion and a 24-hour trading volume nearing $1.98 billion, according to CoinMarketCap, the asset shows signs of weakening momentum. Over the last week alone, its value has declined nearly 4%, slipping from $2.30 to $2.20, while maintaining a sideways trend in recent days.
This movement raises a critical question among investors and traders: Why is XRP down today? While short-term fluctuations are common in crypto markets, three key factors—declining blockchain activity, misleading acquisition rumors, and large-scale token movements—are collectively influencing XRP’s current bearish pressure.
Three Main Reasons Behind Today’s XRP Price Drop
1. Declining Blockchain Activity
One of the most concerning indicators for XRP’s health is the sharp decline in network usage. In March, the Ripple blockchain reported over 608,000 active accounts. However, recent data shows this number has plummeted to just around 31,000 active addresses.
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This dramatic drop reflects reduced transaction volume and lower engagement across the network. As fewer users interact with the ecosystem, the perceived utility and demand for XRP diminish. For investors, declining on-chain activity often signals weakening fundamentals—prompting sell-offs and eroding market confidence.
When blockchain usage slows, it creates a feedback loop: lower demand leads to price stagnation or decline, which further discourages new participants. In XRP’s case, this trend is particularly notable given its original promise as a fast, low-cost settlement solution for cross-border payments.
2. The Ripple-Circle Acquisition Rumor Fallout
Another major catalyst behind today’s price drop stems from misleading headlines about Ripple acquiring Circle—the issuer of the USDC stablecoin.
Earlier reports suggested that Ripple was in talks to acquire Circle in a potential $5 billion deal. These rumors sparked excitement across the crypto community, with many speculating that such a move could consolidate two major players in digital payments and enhance XRP’s integration into mainstream finance.
However, Ripple CEO Brad Garlinghouse quickly stepped in to clarify: there are no plans to acquire Circle. He emphasized that the company remains focused on its core mission—expanding RippleNet and advancing central bank digital currency (CBDC) projects globally.
Even more notably, Ripple’s CTO David Schwartz had jokingly tweeted a bid of $6 billion for Circle—a post he later deleted after it was misinterpreted as a serious offer. Despite being labeled as satire, the tweet gained traction and contributed to market confusion.
Once the joke was debunked, investor sentiment shifted rapidly. The false expectation of a major strategic acquisition evaporated, leading to disappointment and triggering a wave of profit-taking and short-term selling.
FAQ:
Q: Did Ripple actually try to buy Circle?
A: No. Ripple’s leadership confirmed they never pursued an acquisition of Circle. The idea originated from a misunderstood joke by the CTO and was not a genuine business proposal.
Q: Could Ripple and Circle still partner in the future?
A: While no official collaboration exists now, both companies operate in the digital payments space. Future partnerships aren’t impossible—but remain speculative at this stage.
3. Whale Transfers and Token Unlock Events
Large token movements have also played a significant role in today’s downward pressure on XRP.
Within a seven-hour window, Whale Alert detected over 1 billion XRP leaving Ripple’s escrow accounts. This included:
- 500 million XRP unlocked directly,
- 100 million transferred to an undisclosed wallet,
- Another 400 million moved to another private address.
The total value of these transactions exceeds $2.2 billion, sending shockwaves through the market.
Historically, large unlocks and whale transfers trigger anxiety among retail investors. Why? Because they fear these tokens will be dumped on exchanges, increasing supply without matching demand—ultimately driving prices lower.
While Ripple regularly releases XRP from escrow as part of its transparent distribution model, timing matters. When multiple large transfers occur simultaneously—especially amid weak market sentiment—they amplify volatility and fuel bearish narratives.
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XRP Price Analysis: Bullish or Bearish Outlook?
On the USDT chart, XRP is currently consolidating around the $2.20 level. Technical indicators present a mixed picture—revealing both risks and potential opportunities for traders.
Bearish Scenario
If XRP fails to hold above the critical $2.00 support level, further downside could follow. A breakdown below this zone may open the path toward $1.80—or even as low as $1.60 in worst-case scenarios.
Key technical signals support this caution:
- Relative Strength Index (RSI): Sitting at 44.21, below the neutral 50 threshold, indicating weak buying momentum.
- MACD Indicator: The MACD line remains below both the signal line and zero line, with red histogram bars expanding—signaling ongoing selling pressure.
Without strong positive catalysts or institutional buying, bears may continue to dominate in the short term.
Bullish Scenario
Conversely, if XRP can break above the $2.40 resistance level with strong volume, a rebound toward $2.75 or even $3.00 becomes feasible.
For this bullish reversal to take hold:
- RSI must rise above 50,
- MACD should turn positive (green bars above the signal line),
- And ideally, news-driven momentum—such as regulatory clarity or new payment partnerships—should emerge.
Whale accumulation during dips could also act as a springboard for upward movement. Historically, XRP has shown strong recoveries following periods of oversold conditions.
FAQ:
Q: Is now a good time to buy XRP?
A: It depends on your strategy. Short-term traders might wait for clearer technical confirmation (like a breakout above $2.40). Long-term believers may see the current dip as an accumulation opportunity—if they trust Ripple’s global payment vision.
Q: How does escrow release affect XRP price?
A: Regular escrow releases are planned and publicized by Ripple. They only impact price negatively when combined with poor market sentiment or lack of demand.
Q: What would drive XRP higher in 2025?
A: Potential drivers include favorable SEC lawsuit resolution, broader adoption of RippleNet by banks, CBDC integrations, or even an approved XRP ETF—though none are guaranteed.
Final Thoughts: A Convergence of Pressures
Today’s decline in XRP isn’t due to one isolated event—it’s the result of three converging forces: reduced blockchain activity weakening fundamentals, false expectations from a viral joke about Circle acquisition, and large token unlocks sparking sell-off fears.
While none of these factors suggest long-term collapse, they do highlight how sensitive crypto markets are to sentiment, misinformation, and supply dynamics.
For traders and investors alike, staying informed—not reactive—is key. Monitoring on-chain data, verifying news sources, and understanding technical patterns can help navigate volatile conditions more effectively.
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As always, conduct thorough research before making any investment decisions. Cryptocurrency markets move fast—but informed strategies move smarter.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always perform your own due diligence before investing in any digital asset.