The XRP price moved sharply lower today, slipping below the closely watched $2.00 psychological support level as a wave of long liquidations swept through the derivatives market. XRP, currently ranked fifth by market capitalization, was trading at $1.96 at the latest check. The token is down 5.7% over the past week, reflecting continued selling pressure across the broader crypto market. The sell-off unfolded amid a wider risk-off shift in global markets, triggered in part by U.S. President Donald Trump’s renewed tariff threats targeting European countries over Greenland.
The announcement unsettled investors, prompting a retreat from higher-risk assets such as cryptocurrencies and accelerating deleveraging across digital-asset derivatives. Despite the price decline, XRP’s market capitalization stands at $119.38 billion, slipping 4.28% on the day as investors reacted to recent volatility and ongoing liquidations in the derivatives market.
Technical indicators continue to signal downside pressure for XRP. The 10-day Exponential Moving Average (EMA) stands at 2.0509, while the 10-day Simple Moving Average (SMA) is at 2.0675, with both indicators flashing sell signals as the current price trades below these levels.
Momentum indicators also point to weakening strength. The Relative Strength Index (RSI-14) is at 43.33, suggesting XRP is neither oversold nor overbought but remains tilted toward bearish momentum. Meanwhile, the MACD (12, 26) level is at 0.0082, reinforcing a sell bias and indicating that bullish momentum continues to fade.
The long liquidations tied to XRP spiked over the past 24 hours, signaling that bullish traders using leverage were forced out as prices fell. These prolonged liquidations intensified downside pressure, pushing the token through what many traders considered a key technical and psychological threshold.
Market participants often refer to $2 as a “buy wall,” where institutional and high-net-worth investors historically step in to accumulate. Once XRP slipped below $2, that psychological anchor flipped into near-term resistance, increasing volatility and heightening uncertainty about the next move. At the same time, a swift recovery back above $2 could signal a classic “bear trap,” especially if volume and open interest stabilize.
Liquidations Reveal Retail Stress
U.S. President Donald Trump’s announcement of a 10% tariff threat on eight European countries, including Denmark, Sweden, Norway, Finland, Great Britain, France, Germany, and the Netherlands, beginning February 1, sparked a broad risk-off move across global markets. Futures tied to the Nasdaq slid about 1%, Bitcoin retreated below $93,000, and selling pressure intensified across the altcoin market.
For XRP, the impact was more pronounced. As a higher-beta crypto asset, XRP tends to react more sharply than Bitcoin during periods of macro stress. The tariff announcement revived concerns of a renewed trade-war environment reminiscent of 2025, prompting traders to cut exposure and unwind leveraged positions.
Data from CoinGlass show a sharp drop in open interest for XRP derivatives, confirming that much of the recent selling pressure came from leveraged positions rather than spot holders. This pattern suggests that retail traders betting on a quick rebound were disproportionately impacted, while longer-term investors remained relatively inactive.
In contrast, on-chain indicators tracked by Santiment point to relatively stable activity on the XRP Ledger (XRPL). Large wallet addresses, often referred to as whales, did not show aggressive distribution during the sell-off. Some analysts interpret this divergence as a sign that larger players may be waiting for clearer confirmation before re-entering, or quietly accumulating as retail positions are flushed out.
The pullback comes despite a more stable regulatory environment for Ripple Labs in the United States. Following the resolution of major legal uncertainties with the SEC in previous years, XRP has benefited from improved clarity around its market status. However, regulatory clarity does not shield XRP from broader market forces. Weakness in major assets like Bitcoin (BTC) and Ethereum (ETH) has weighed on altcoins, with risk appetite fading across the sector. When BTC and ETH lose momentum, high-beta tokens such as XRP often experience exaggerated moves.
What traders Are watching Next
Going forward, traders are closely monitoring whether XRP can reclaim the $2 level and convert it back into support. Key signals include changes in derivatives volume, a rebound in open interest, and renewed spot buying on US-based exchanges. Sustained whale accumulation on the XRPL could also strengthen the case for a short-term bottom.
For now, the drop below $2 highlights how quickly sentiment around XRP can shift. While long liquidations have cleared excess leverage, the next phase will depend on whether buyers view this zone as an opportunity or step aside until clearer confirmation emerges.
