XRP Faces Altcoin Wave as Analysts Suggest Lawsuit is No Longer the Main Concern

In spite of weekly enthusiasm, XRP has fallen below the $3 threshold once more, exasperating its community as the token lags behind wider market patterns. Presently, it is trading around $2.90, having decreased over 4% in the last 24 hours, with a market capitalization of about $173 billion.

Despite a landmark U.S. spot XRP ETF introduction and Ripple’s enhanced connections with Spain’s BBVA bank, the token has not been able to maintain upward momentum.

Experts now contend that XRP’s sluggish performance can no longer be attributed to the U.S. Securities and Exchange Commission (SEC) lawsuit, which has been cited for a long time as a significant hindrance to development. With that matter settled, focus has shifted to more profound market dynamics.

Profit-Taking, Liquidations, and Market Sentiment

XRP’s ETF launch witnessed an unprecedented $37 million in first-day trading volume, but it also incited a typical “sell the news” reaction. Numerous institutional investors withdrew their positions, initiating strong selling pressure.

Compounding the decline, XRP traders encountered nearly $79 million in liquidations over the past day, predominantly from long positions. This surge of forced selling pushed prices down, eroding confidence among retail investors.

Meanwhile, the overall crypto market experienced a 4% drop in value, with billions erased from altcoin capitalization. Ethereum (ETH) and other prominent assets also faced significant declines, further dragging XRP down.

XRP's value records noteworthy losses on the daily chart. Source: XRPUSD on Tradingview

Can XRP Sidestep a Steeper Drop?

XRP is currently striving to maintain support close to $2.80, with traders cautioning that a breach below could expose the token to the $2.50–$2.60 range. On the other hand, bulls need to reclaim the $3.10–$3.20 zone to restore momentum and revive aspirations of testing the $3.65 all-time peak.

Market sentiment remains varied. Some commentators, like analyst BarriC, indicate that XRP could still rise dramatically if it adheres to historical patterns, even suggesting a potential $300 price target by 2026.

Conversely, others remain doubtful, highlighting ongoing selling pressure and stricter regulatory compliance demands for altcoin ETFs. For the time being, XRP holders confront a significant challenge: uphold current levels or risk more profound losses as the altcoin market selloff accelerates.

Cover image from ChatGPT, XRPUSD chart from Tradingview

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