XRP posted one of its sharpest declines of 2026 on Feb. 5, falling 15% within 24 hours and dropping to an intraday low of $1.22. The sell-off left the token down by nearly 45% from its Jan. 6 peak of $2.40, wiping out a large portion of its earlier gains and dragging its valuation back to levels last seen in late 2024.
According to market data cited in the report, XRP started the day trading above $1.50 before tumbling alongside a broader crypto market decline that also pushed bitcoin to its lowest price in more than a year. Although XRP later recovered slightly to trade around $1.26 by late morning U.S. time, the rebound was limited and did little to change the scale of the damage. Its market capitalization fell to roughly $80 billion, highlighting how quickly value was erased during the session.
The losses were not confined to a single day. Over the previous seven days, XRP had already shed nearly 30%, making it one of the weakest performers among major digital assets. The latest drop therefore reinforced a broader trend of deteriorating sentiment rather than representing an isolated price shock.
Derivatives Liquidations Added to the Pressure
The intensity of the move was amplified in the derivatives market, where leveraged positions were forced out as prices slid through key levels. The report said the decline triggered approximately $43 million in long liquidations, compared with about $4.2 million in short liquidations. That imbalance suggests bullish traders were caught offside and liquidated at scale, adding to the downside momentum.
In crypto markets, forced liquidations often accelerate sharp price moves because positions are automatically closed into weakness. When this happens across a large number of leveraged longs, selling pressure can feed on itself. XRP’s decline appeared to fit that pattern, with the unwind in derivatives reinforcing a fast-moving spot-market sell-off.
Why XRP Fell Harder Than Other Large Altcoins
While XRP moved lower in tandem with bitcoin and other large-cap altcoins, the report noted that its slide was intensified by a distinct wave of bearish sentiment on social media. Some influential accounts urged holders to exit immediately, and although many users dismissed those comments as overly alarmist, the messaging may still have contributed to fear-driven selling. In fast-moving crypto markets, perception can matter almost as much as fundamentals, especially when technical support is already weakening.
What makes the episode notable is that even net positive inflows into XRP spot ETFs were not enough to stabilize price action. That detail suggests broader market stress and positioning pressures outweighed what would otherwise be interpreted as supportive demand. In other words, capital inflows alone could not offset the combination of panic selling, weakening chart structure, and macro risk aversion.
Technical Breakdown and Weakening Liquidity
Ryan Lee, chief analyst at Bitget, said XRP’s break below key support levels reflected an intensifying short bias rather than a single fundamental event. In his view, the token lost important technical zones that had previously helped anchor the market. Once those levels failed, chart patterns shifted toward a bearish continuation structure, while thinner liquidity made the downside move more severe as sellers overwhelmed available bids.
Lee identified two main catalysts behind the accelerated decline. First, elevated leverage and growing short exposure compressed price action and turned a standard pullback into a much steeper drop. Second, a broader risk-off environment tied to geopolitical uncertainty and interest-rate concerns reduced investor appetite for high-beta assets such as XRP. In periods of market repricing, traders often rotate toward assets perceived as relatively safer, including bitcoin and gold.
This explanation places XRP’s weakness within a wider market context. The sell-off was not just about one token underperforming; it reflected a combination of technical damage, crowded positioning, and a broader reduction in risk appetite across financial markets.
What the Sell-Off Signals for the Market
XRP’s plunge stands out because of both its speed and its depth. A decline of nearly 45% from a January peak indicates more than routine volatility. It shows how quickly momentum can reverse when support breaks, leverage is high, and sentiment turns hostile. The fact that the token’s market capitalization fell back to late-2024 levels underlines the scale of the retracement.
For traders and investors, the episode also serves as a reminder that crypto market structure can magnify losses in a short period of time. Derivatives liquidations, social-media-driven panic, and weak liquidity can combine to produce outsized moves even when there is no singular fundamental collapse behind the asset. XRP’s drop appears to be an example of that dynamic.
Going forward, market participants are likely to watch whether XRP can regain lost support zones and whether broader sentiment in bitcoin and the altcoin market begins to stabilize. Until then, the latest decline leaves XRP under pressure and highlights the fragility of risk assets in a market dominated by leverage and fast-changing sentiment.