The XRP price has erased all gains accumulated over the past two weeks, sparking concern among investors and traders. This downturn follows a confluence of market dynamics, regulatory uncertainty, and macroeconomic shifts. In this analysis, we’ll explore the key factors behind today’s XRP price drop, including the delayed SEC-Ripple meeting, reduced expectations for a Fed rate cut, and on-chain movements affecting market supply.
Key Factors Behind the XRP Price Decline
1. Postponed SEC-Ripple Meeting Sparks Uncertainty
On August 1, 2025, the crypto community anticipated a closed-door meeting between Ripple executives and U.S. Securities and Exchange Commission (SEC) officials. Many speculated that this session could pave the way for a resolution in the long-running legal battle over whether XRP qualifies as a security.
However, the meeting was unexpectedly canceled. Neither Ripple nor the SEC provided an official explanation, deepening uncertainty in the market. Regulatory clarity has long been a catalyst for XRP price movements, and any delay tends to trigger sell-offs as traders reassess risk.
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2. Fading Hopes for September Rate Cut
Broader crypto market sentiment has also turned cautious due to diminishing odds of a Federal Reserve interest rate cut in September 2025. Lower interest rates typically boost risk assets like cryptocurrencies by reducing the appeal of traditional safe-haven investments.
According to CME Group’s FedWatch Tool data as of August 2, 2025, the probability of a 25-basis-point rate cut in September stands at 71.50% — down from 88.2% just one week earlier. This shift follows Federal Reserve Chair Jerome Powell’s July 31 press conference, where he emphasized that any dovish policy move would depend heavily on cooling inflation data.
As expectations for looser monetary policy wane, capital flows out of speculative assets like XRP. Since Powell’s statement, XRP has dropped by as much as 15.35%, reflecting traders locking in profits amid macroeconomic uncertainty.
3. Massive XRP Transfer from Escrow Adds Selling Pressure
In the past 24 hours, Ripple transferred over 1 billion XRP from its escrow system — a routine part of its quarterly release mechanism. Whale Alert tracked multiple large transactions moving in and out of Ripple’s custodial wallets.
Specifically, 500 million XRP were released in two batches on August 2, increasing the circulating supply. When such large volumes enter the market without matching demand, downward price pressure often follows.
That said, Ripple has a history of relocking a significant portion of newly released tokens. For instance, after unlocking 1 billion XRP on June 1, the company relocked 800 million while selling only around 300 million (worth approximately $182 million). If a similar pattern repeats, the actual market impact may be less severe than feared.
Still, short-term traders often react negatively to large on-chain movements regardless of long-term intentions.
Technical Analysis: Bearish Divergence Signals Correction
From a technical standpoint, XRP is undergoing a broader corrective phase preceded by bearish divergence on the daily chart.
What Is Bearish Divergence?
Bearish divergence occurs when price reaches a higher high, but momentum indicators like the Relative Strength Index (RSI) form a lower high. This signals weakening upward momentum and often precedes a pullback.
In XRP’s case:
- Price peaked at approximately $0.658 on July 31.
- RSI reached a lower high of 65.48, indicating fading bullish strength.
- Rising daily trading volume during the decline suggests strong participation in the sell-off.
This pattern aligns with classic technical models predicting consolidation or reversal after extended rallies.
Key Support and Resistance Levels
As of August 2, XRP is testing the 0.5 Fibonacci retracement level at around $0.571** as immediate support. A successful bounce here could lead to a recovery toward the next resistance at **$0.607 (0.618 Fib level).
Conversely, failure to hold $0.571 may trigger a deeper correction toward the confluence of:
- The 50-day EMA (~$0.54)
- The 200-day EMA (~$0.54)
- The 0.382 Fibonacci level
This zone represents a critical support area. A breakdown below it could open the door to further downside toward $0.50.
👉 Analyze real-time XRP charts and indicators to spot trend reversals early.
Frequently Asked Questions (FAQ)
Why did the SEC-Ripple meeting get canceled?
Neither Ripple nor the SEC has officially explained the cancellation. Such delays are not uncommon in legal proceedings, but they often fuel speculation and market volatility due to unresolved regulatory questions.
Does Ripple selling XRP always cause price drops?
Not necessarily. While large releases can increase supply, Ripple frequently relocks unused tokens and uses sales proceeds for ecosystem development. Market reaction depends on perceived intent and overall sentiment.
Is XRP still a good investment despite the drop?
Many analysts believe XRP remains fundamentally strong due to its use in cross-border payments and growing adoption by financial institutions. However, short-term volatility linked to regulation and macro trends should be expected.
How does Federal Reserve policy affect XRP?
Crypto assets are sensitive to monetary policy because lower interest rates reduce the opportunity cost of holding non-yielding assets like XRP. When rate cuts are delayed, risk appetite tends to decline.
Can XRP recover its recent losses?
Yes — technical indicators suggest potential rebound scenarios if support at $0.571 holds. Positive regulatory news or renewed macro optimism could act as catalysts for recovery.
What should XRP holders do now?
Long-term holders may view this dip as an accumulation opportunity, while traders might wait for confirmation of trend reversal through volume-supported breakouts or RSI stabilization above 50.
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Final Thoughts
The current decline in XRP price is not driven by a single factor but rather a combination of delayed regulatory progress, shifting macroeconomic expectations, and temporary supply increases from escrow releases. While short-term sentiment is bearish, historical patterns suggest that such corrections are often followed by consolidation and eventual recovery — especially if fundamental drivers remain intact.
For investors, staying informed about both on-chain activity and broader financial markets is crucial. Monitoring key technical levels and upcoming developments in the Ripple-SEC case will help navigate future volatility.
As always in crypto, timing matters — but so does understanding context.