XRP has slumped sharply and is now hovering near major support, as macro risk-off moves and leverage unwinds keep sentiment fragile. XRP, which tends to amplify moves during periods of market stress, came under pressure as traders cut exposure quickly, pushing the token down through near-term support levels and accelerating losses. Going into the second half of January, XRP had already begun to lose momentum after a strong start to the year. Earlier gains of close to 40%, driven by optimism around regulatory clarity and renewed institutional interest, had lifted prices sharply from late-2025 levels.
That rally, however, left XRP increasingly vulnerable to profit-taking, particularly as broader crypto market liquidity thinned and risk appetite began to waver. The current sell-off gathered pace as a broader risk-off move swept through global markets. Leverage played an important role in magnifying the decline. In the days leading up to the sell-off, derivatives data showed a build-up of long positions as traders positioned for further upside following XRP’s early-year strength.
Macro conditions remain central to XRP’s near-term direction. As bond yields eased and equity markets stabilised and, in Asia and the United States (US), hit record highs, XRP participated but only in a very modest fashion, underscoring its loose correlation with shifts in global risk appetite. However, this week’s mild recovery has so far lacked any follow-through, highlighting lingering caution among investors after the speed of the earlier decline and ongoing uncertainty around monetary policy and growth prospects. Over a longer horizon, continued progress in payments adoption, regulatory engagement and institutional interest provide a supportive backdrop that has so far limited downside.
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