The cryptocurrency XRP has entered February under significant strain, trading at its lowest levels in over a year. While a scheduled token release from Ripple’s escrow has contributed to the supply overhang, analysts point to a broader market sell-off and macroeconomic concerns as the primary drivers of the current weakness.
A Predictable Yet Impactful Supply Release
On February 1, Ripple executed its programmed escrow release, unlocking 1 billion XRP in four separate transactions of 100 million, 400 million, 100 million, and 400 million tokens. This mechanism, established in 2017, is designed to provide transparency and predictability regarding XRP’s circulating supply.
A critical detail for investors is that the company typically does not release the full amount into the open market. Following the same pattern, Ripple returned 700 million XRP to escrow in two transactions (400 million and 300 million). Consequently, the net increase in supply was 300 million XRP—a figure market participants consider more relevant than the headline gross amount.
Broader Market Forces Exert Dominant Influence
Historically, these monthly escrow events have had a muted immediate impact due to their predictable nature. The current price action appears more closely tied to the wider crypto market downturn. Both Bitcoin and Ethereum have recently touched multi-month lows, and XRP has followed this downward trajectory, exhibiting a high correlation with Bitcoin that sources estimate at approximately 87%.
As of today, XRP is trading at $1.58, matching its 52-week low. This underscores the prevailing negative sentiment following weeks of losses.
Macroeconomic headwinds are also applying pressure. The expectation that interest rates may remain elevated for longer has created a “risk-off” environment, which traditionally disadvantages speculative assets like cryptocurrencies.
Should investors sell immediately? Or is it worth buying XRP?
Conflicting Signals from Large Holders and ETFs
Despite the bearish backdrop, on-chain data reveals some accumulation. According to analytics firm Santiment, wallets holding more than 1 billion XRP have increased their collective holdings since early January, from 23.35 billion to 23.49 billion XRP.
The picture from exchange-traded funds (ETFs) is mixed. Since their launch in November 2025, XRP spot ETFs have seen cumulative inflows exceeding $1.3 billion. However, January experienced significant single-day outflows that temporarily pushed net flows into negative territory before a recovery towards the month’s end.
From a technical analysis perspective, key levels to watch are:
– Immediate Support: $1.55; a break below this could target the $1.46–$1.48 zone.
– Initial Recovery Signal: A sustained move above $1.68–$1.70.
– Major Resistance: Near $1.97.
Seasonality also presents a challenge. Historical data indicates February has statistically been a weak month for XRP, with a median return of -8.12%. In February 2025, the asset declined by roughly -29%.
In summary, XRP is contending with a combination of incremental net supply from its escrow and a hostile macro climate. While buying from large wallets and potential ETF inflows provide some underlying support, they have yet to catalyze a reversal of the current downtrend.
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