XRP Plummets 16% Amid Market Turmoil and Forced Liquidations
By John Nada·Feb 5, 2026·2 min read
XRP faces a dramatic 16% drop, the worst among major tokens, driven by forced liquidations and a shift in market sentiment.
XRP plunged more than 16% in a single day, marking the worst performance among major tokens. This sharp decline brought the price down to around $1.29, while Bitcoin fell 7% on Thursday, according to CoinDesk. The downturn was exacerbated by forced selling in derivatives markets, with data from Coinglass indicating approximately $46 million in XRP liquidations over the past 24 hours, largely driven by bullish bets.
The selloff highlighted that the market was not just about spot holders exiting; leveraged traders faced significant losses as the price broke through critical support levels. The trading pattern revealed a slow bleed throughout the day, culminating in a sudden drop late in the session, a behavior typical when buyers withdraw until a final wave of stops is triggered.
Despite XRP's slump, its fundamentals have been improving. Recently, Flare and Hex Trust announced institutional access for FXRP minting and FLR staking, designed to enable institutions to utilize XRP in DeFi without selling it. However, this development did little to buoy market sentiment, indicating that traders either doubt the potential demand or believe substantial institutional flows are not imminent.
In addition, Ripple, linked to XRP, secured e-money licenses in Luxembourg and integrated Hyperliquid into its institutional prime brokerage platform, Ripple Prime, enhancing clients' access to on-chain perpetual liquidity. While these advancements could enhance XRP's appeal during market uptrends, they failed to prevent the recent selloff. Historically, XRP rallies often depend more on bursts of positioning and momentum than on gradual adoption.
The current technical situation is concerning. XRP's drop below the $1.44 area turned a previous support zone into overhead resistance. With limited trading history between current levels and $1.00, that psychological threshold looms large. In the near term, XRP resembles a leverage unwind masquerading as a fundamental narrative, and neither aspect shows signs of resolution.
This dramatic decline underscores the volatility in the crypto market and the impact of leveraged trading. As traders remain cautious, the way forward for XRP hinges on both market sentiment and the unfolding landscape of institutional engagement.