In a recent development in the cryptocurrency market, Ripple’s XRP token experienced a decline of 1.15%, settling at $2.05. This drop was attributed to investors liquidating their leveraged positions during the latest trading round. Across various crypto exchanges, it was noted that the trading volume for XRP fell by 20%, amounting to $1.24 billion on Sunday. As a result, Ripple’s market capitalization now stands at approximately $125 billion, reflecting a 2% decrease in price over the week.
This bearish movement in XRP coincided with a significant long/short liquidation ratio of 8,700% near the $2 mark. This led to a striking $522,000 in long positions being liquidated, contrasted with only $6,000 in short positions. The $2 threshold has increasingly become a focal point for liquidations, as any upward movement above this level triggers cascading margin calls, thereby reinforcing downward momentum.
Supporting a more optimistic future for XRP, the proposed U.S. Clarity Act could pave the way for XRP exchange-traded funds (ETFs) to function similarly to bank accounts, although clarity on the specifics remains elusive. While institutional adoption appears promising in the long term, the near-term uncertainty surrounding tax implications and operational considerations has led to some investor hesitation. ETF inflows, which saw a significant peak of $243 million in November 2025, notably slowed to just $12.84 million in January.
Technical analysts pointed out that XRP has recently closed below both the 50% Fibonacci retracement level at $2.09 and its 30-day average of $2. The negative MACD histogram and RSI at 50.45 further indicate a loss of upward momentum. Experts in the crypto market attribute XRP’s current downturn to a convergence of liquidations aggravating technical weaknesses, along with ongoing regulatory hesitations.
Despite the setbacks, there are signs of potential long-term support for XRP. Notably, a recent surge in whale accumulation, with 25,000 new wallets, coupled with the potential for ETFs, suggests a glimmer of hope. However, analysts have identified the price range of $2.04 to $2.10 as crucial to avoid a more substantive correction. The market is closely monitoring whether XRP can maintain the 61.8% Fibonacci level at $2.02 on a closing basis; a breach below this level could prompt algorithmic traders to target liquidity pools in the vicinity of $1.95.
Additionally, Evernorth, a treasury firm focused on XRP, announced its intention to pursue an initial public offering (IPO) in the first quarter of 2026. This shift aims to enhance institutional access to XRP by circumventing custody and compliance obstacles, allowing investors to engage with the cryptocurrency through public equity instead of direct token ownership. Analysts view this move as a potentially bullish development, as it offers a regulated entry point for institutions that may be cautious about the complexities of cryptocurrency investments. However, the overall success of the IPO will depend on market reception and the prevailing sentiment in the broader crypto industry.
In regulatory news, Ripple has received preliminary approval for an Electronic Money Institution (EMI) license from Luxembourg’s CSSF and has registered with the UK FCA. This approval enables Ripple to expand its payment services and integrate the RLUSD stablecoin with partners like LMAX Group. Currently, spot XRP ETFs hold 803.78 million XRP, valued at approximately $1.52 billion, with weekly net inflows increasing by 47% to $56.83 million. Analysts believe that sustained accumulation might tighten supply, although XRP’s price remains relatively stagnant, hovering near the $2.05 mark.
