The cryptocurrency sector is in the grip of a severe downturn, with XRP suffering some of the most pronounced losses. The digital asset has now shed over 60% of its value since its July peak of $3.65, trading at its lowest level in months. This decline is being fueled by a confluence of negative macroeconomic signals from the United States and a destabilizing wave of forced liquidations in derivatives trading.
Institutional Flows Defy Retail Panic
Interestingly, a divergence is emerging between institutional and retail investor behavior. While Bitcoin and Ethereum exchange-traded funds (ETFs) have recently seen outflows, XRP-focused ETFs have attracted approximately $1.3 billion in inflows since their launch in November 2025. This suggests that larger, professional investors may be using the depressed price environment to establish or increase their holdings.
Ripple CEO Brad Garlinghouse alluded to this potential opportunity in recent public comments. Quoting famed investor Warren Buffett on social media, he invoked the adage to “be fearful when others are greedy, and greedy when others are fearful.” His implication was clear: the current valuation may represent a strategic entry point rather than a sign of fundamental failure.
Cascade of Liquidations Intensifies Selling Pressure
The downward spiral accelerated significantly on February 5th, when forced liquidations of XRP long positions totaled around $6.6 million. This deleveraging event created substantial additional selling pressure in the market.
Broader economic concerns are also weighing heavily on risk assets. Disappointing U.S. labor market data revealed that initial jobless claims came in at 231,000, higher than analysts had forecast. Furthermore, the anticipated “Market Structure Bill,” which promised greater regulatory clarity for the crypto industry, has been postponed in the U.S. Senate until early 2026, extending a period of uncertainty.
Should investors sell immediately? Or is it worth buying XRP?
Market sentiment, as measured by the Crypto Fear & Greed Index, has collapsed to a reading of 5, indicating “Extreme Fear.” Historically, such levels have coincided with major market bottoms, including those seen in 2018, 2020, and 2022.
Key Technical Levels Under Threat
From a technical analysis perspective, XRP has breached several critical support levels. The previous support zone near $1.44 has now flipped to become a significant resistance barrier. All eyes are now on the psychologically important $1.00 mark, which is viewed as the next major line of defense.
A sustained break below $1.00 could trigger algorithmic selling programs, potentially leading to a steeper decline. Analysts suggest that if this level fails, a “maximum accumulation zone” between $0.70 and $0.90 could come into play. Such a move would effectively erase nearly all of the gains from the 2025 rally.
The upcoming weekend trading sessions are likely to prove decisive for XRP’s near-term direction, with the $1.00 threshold serving as the focal point for traders and algorithms alike.
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