XRP Price Forecast - XRP-USD Falls Below $2 After $400M Whale Sell-Off — XRP ETF Hype Turns to Capitulation

Ripple (XRP-USD) Falls Below $2 as ETF Optimism Turns Into a $400 Million Whale Exit and Market Liquidity Tightens

XRP Drops to $1.97 After ETF Euphoria Fades

Ripple (XRP-USD) has plunged to $1.97, losing almost 15% in a week as heavy liquidation swept through the broader digital-asset market. The fall came directly after the high-profile debut of two U.S.-listed XRP exchange-traded funds — Canary Capital’s XRPC and Bitwise’s XRP — which together generated $22 million in first-day turnover but failed to maintain momentum. Instead of triggering sustained inflows, the listings sparked aggressive profit-taking. Blockchain data shows large holders unloading roughly 200 million XRP, equivalent to nearly $400 million, in just two days, creating an intense wave of selling pressure. The token’s market capitalization slid below $120 billion, its lowest level since May, while daily trading volume spiked above $9.6 billion, signaling that forced selling rather than new demand drove activity.

ETF-Driven Rally Collapses Into Derivative Liquidations

The ETF launches had been framed as a turning point for institutional adoption, but the reaction mirrored the short-term pattern that followed the first week of spot-Bitcoin ETFs in early 2024. Once XRP-USD failed to hold the $2.25 zone, traders rapidly unwound positions. On major futures exchanges such as Binance and OKX, funding rates flipped sharply negative, confirming that leverage turned net-short. Open interest fell 28% in seventy-two hours as liquidations crossed $300 million, forcing a cascade that dragged prices below $2.00 for the first time in three months.

This pattern reflects structural fragility in crypto liquidity. While exchange-traded funds add long-term depth, they do not shield the market from short-term speculation. The same institutions that briefly accumulated exposure through ETF vehicles also hedged futures aggressively as volatility spiked, neutralizing net inflows.

Wider Market Weakness Accelerates the Drop

The selloff in XRP-USD coincided with a broad correction across digital assets. Bitcoin (BTC-USD) tumbled to $83,200 from a weekly high above $88,000, while Ethereum (ETH-USD) sank to $2,757, erasing much of November’s gains. In total, more than $2 billion in crypto positions were liquidated within twenty-four hours.

The macro backdrop amplified the move. The Federal Reserve signaled that further rate cuts are not imminent, cooling risk appetite, while renewed U.S.–China tariff tensions under the Trump administration reignited fears of global growth slowdown. The result was a simultaneous drawdown in equities — the S&P 500 lost roughly $2 trillion in capitalization this week — and digital assets, both of which depend on abundant liquidity and stable yields.

On-Chain Metrics Reveal Deep Capitulation

Profitability across the XRP-USD network has deteriorated sharply. Only 58.5% of circulating tokens remain in profit, down from over 70% at the start of the month. Roughly 26.5 billion XRP are now held at a loss, the largest unrealized-loss share since late 2024. Daily realized losses averaged $75 million on a thirty-day basis, matching levels seen during the April capitulation phase.

Despite the pain, network participation remains unusually high: active addresses have exceeded 1.2 million per day, and transaction throughput has stabilized around 1,800 TPS, suggesting that core users continue to engage even as traders exit. Historically, such divergence between network activity and price weakness has preceded medium-term bottoms, though confirmation requires stabilization above $1.85 for several sessions.

Technical Breakdown Points to Continued Weakness

The chart structure for XRP-USD has turned decisively bearish. The token slipped beneath both its 50-day moving average ($2.06) and 200-day average ($2.21), confirming a classical death-cross formation. Momentum oscillators reinforce the picture: the Relative Strength Index sits near 31, its lowest reading since February, indicating oversold conditions yet showing no reversal signal. Immediate support lies in the $1.85 – $1.90 zone; failure to defend this level could expose $1.70 as the next downside target. On the upside, heavy supply remains clustered around $2.15–$2.25, where previous ETF-driven volume peaked.

Short-term traders are watching for a potential volatility squeeze between these bands. Historical data show that when XRP trades this close to oversold levels with open interest compressed, sharp relief rallies of 8–12% often occur before the next directional move. However, absent new institutional inflows, any rebound above $2.20 is likely to face immediate profit-taking.

ETF Flows and Institutional Sentiment

The two new ETFs added structural visibility but have not yet delivered sustainable capital inflows. Canary Capital’s XRPC closed its first week with $11.6 million AUM, and Bitwise XRP ended near $9.4 million — modest figures relative to Bitcoin’s ETF debut, which attracted more than $4 billion in a single week. Early investors appear to be retail rather than institutional allocators.

Across the broader crypto-ETF landscape, net outflows of $38 million were recorded this week, led by $3.79 billion in redemptions from Bitcoin products. Such systemic outflows reduce arbitrage capital that typically supports cross-asset liquidity. Analysts at several trading desks expect XRP-linked ETFs to begin attracting real pension and advisory flows only after volatility compresses, likely by mid-2026, once the asset proves it can sustain a stable trading range.

Macro Forces and Currency Dynamics

While global headwinds weigh on sentiment, certain macro variables could gradually shift in XRP’s favor. The U.S. dollar has weakened nearly 4% year-to-date, and both RBC Capital Markets and Morgan Stanley Research forecast an additional 8–10% decline through 2026 as tariff-related trade deficits widen. Because more than half of XRP-USD’s liquidity is offshore — particularly in Asia and the Middle East — a softer dollar increases foreign-currency-adjusted returns and cushions dollar-denominated losses.

Still, persistent inflation around 3%, combined with Treasury yields above 4.2%, limits speculative capital inflow into crypto. Investors continue to prefer short-duration government paper to volatile digital assets, delaying the rotation of liquidity that typically fuels recovery cycles.

Outlook and Strategic Interpretation

The near-term setup for XRP-USD remains dominated by volatility and macro uncertainty. Price is expected to oscillate between $1.85 and $2.15 over the coming weeks. If the pair closes below $1.85 on heavy volume, the next technical target lies near $1.70, corresponding to March’s accumulation zone. Conversely, a sustained daily close above $2.25 could restore momentum toward $2.40–$2.50, contingent on renewed ETF inflows and stabilization of Bitcoin (BTC-USD) above $85,000.

Institutional behavior remains defensive. Hedge-fund positioning indicates light exposure, while over 78% of current volume originates from retail addresses, a structure that historically precedes prolonged consolidation rather than rapid recovery. Longer-term investors, however, may view this phase as an accumulation opportunity. XRP’s regulatory clarity, growing tokenization initiatives, and the eventual normalization of ETF demand could enable a rebound once macro liquidity improves.

In summary, XRP-USD trades near $1.97, reflecting both structural stress and cyclical correction after an over-extended rally. Short-term price action is bearish with potential probes below $1.90, medium-term dynamics suggest stabilization once derivatives positioning resets, and long-term fundamentals — particularly the integration of ETFs and institutional custody frameworks — still argue for resilience beyond 2026. A decisive break back above $2.30 would be the first confirmation that the liquidation phase has fully exhausted its selling pressure.

That's TradingNEWS