**XRP’s Rollercoaster Ride: What’s Behind the Recent Price Drop?**
A Sudden Dip That Left Traders Stunned
Over just three days, from February 23 to February 26, XRP’s price nosedived by 16.8%, sparking a wave of liquidations totaling a whopping $79 million in leveraged long futures. What makes this drop particularly intriguing is that it happened despite positive regulatory signals and growing optimism surrounding a possible spot XRP exchange-traded fund (ETF) in the U.S..
Adding to the mystery, open interest in XRP futures plummeted, hitting its lowest point in 2025. While this doesn’t necessarily scream bearish, it does raise questions—has XRP’s bullish momentum taken a breather?
XRP aggregate futures open interest, XRP. Source: CoinGlass
Are Traders Losing Interest in XRP?
To get a clearer picture, we need to dive into the funding rates of perpetual contracts, which help gauge trading sentiment. Essentially, when traders are bullish, they’re willing to pay a premium to hold long positions, causing funding rates to turn positive. Conversely, negative rates suggest bearish sentiment.
Interestingly, XRP’s funding rate has remained close to zero since December 9, 2024—a sign that bulls and bears have been locked in a standoff. The last time we saw a spike in leveraged long positions was in early December following XRP’s 140% price surge, right before the crypto took a 22% dive shortly after.
XRP 8-hour perpetual futures funding rate. Source: CoinGlass
What’s Behind the Lack of Enthusiasm?
XRP has had its fair share of rallies, the latest being between February 12 and February 15, when prices soared 17%, from $2.41 to $2.83. However, what’s concerning is that this price jump did not come with a rise in leverage demand—suggesting traders might be shifting their attention elsewhere.
One major factor behind this market hesitation? The ongoing SEC lawsuit against Ripple. While the SEC has eased its pressure on other crypto players like Coinbase, OpenSea, and Uniswap, Ripple remains in the agency’s crosshairs. This legal uncertainty is a double-edged sword—while it weakens investor confidence, a surprise favorable ruling could ignite a massive price breakout.
Related: XRP Ledger unveils institutional DeFi roadmap
John Reed Stark, a former SEC enforcement chief, hasn’t held back in criticizing the crypto industry. He recently voiced his frustration over the weakening of the SEC’s crypto enforcement program, even using a meme to illustrate his point.
Source: JohnReedStark
Ripple’s Strategic Push — A Missed Opportunity?
Another blow to XRP sentiment came from reports that Ripple CEO Brad Garlinghouse’s efforts to push the U.S. government towards a Digital Asset Reserve met resistance. His goal? To encourage the U.S. to consider assets like XRP alongside Bitcoin. However, the Trump administration has reportedly distanced itself from forming a crypto council, further diminishing hopes for such an initiative.
Pierre Rochard, vice president of research at Riot Platforms, highlighted this shift in political stance, reinforcing the possibility that XRP isn’t on the U.S. government’s priority list anytime soon.
Source: BitcoinPierre
Final Thoughts: A Hesitant Market Awaits Clarity
With declining interest in XRP futures and traders seemingly exploring other opportunities, it’s clear that uncertainty is the name of the game. Until we see further clarity on the SEC case and XRP ETF approval prospects, bullish sentiment may take a backseat.
However, one thing history has shown? XRP has a habit of making big moves when least expected. Whether it’s a legal victory, a surprise ETF approval, or a broader market resurgence, XRP’s next chapter is shaping up to be one worth watching.
This article is for informational purposes only and should not be taken as legal or investment advice. The opinions expressed are the author’s and do not necessarily reflect Cointelegraph’s views.
