XRP posted one of its sharpest declines of 2026 on Feb. 5, tumbling 15% in 24 hours and briefly falling to $1.22. The move extended the token’s drawdown to more than 45% from its Jan. 6 peak of $2.40, wiping out gains that had been built since late 2024. Even after recovering slightly to around $1.26 later in the session, the scale of the sell-off left XRP among the weakest major crypto assets in the market.
A Steep Sell-Off in a Weak Market
The decline unfolded in the middle of a broader crypto downturn. XRP reportedly started the day trading above $1.50 before sliding rapidly as risk assets across the sector came under pressure. Bitcoin also fell to its lowest level in more than a year during the same period, underscoring that XRP’s drop was part of a wider market sell-off rather than an isolated event.
Still, XRP’s losses were particularly severe. Over the previous seven days, the token had already lost nearly 30%, placing it among the market’s worst performers. The latest leg lower pushed XRP’s market capitalization down to roughly $80 billion, a level not seen since late 2024. For traders and holders, the speed of the repricing was especially notable because it erased a large portion of the gains accumulated over the prior multi-month rally.
Liquidations Added Fuel to the Decline
The sell-off also caused a significant flush in derivatives markets. According to the reported figures, approximately $43 million in long positions were liquidated, compared with about $4.2 million in short liquidations. That imbalance highlights how heavily the market had been positioned for upside or at least for price stabilization, only to be caught off guard by the intensity of the decline.
When long liquidations cluster in a short time frame, they often accelerate downside momentum because forced selling adds to already weak spot demand. In XRP’s case, the liquidation wave appears to have compounded an already fragile market structure, making the decline steeper than a normal correction. Traders watching price action in real time would have seen a familiar pattern: support breaks trigger liquidations, liquidations trigger more selling, and the market falls faster than many expected.
Social Media Bearishness Deepened Fear
Beyond the mechanics of price and leverage, sentiment also played an important role. The report noted that bearish commentary on social media intensified during the decline, with some influential users urging holders to exit their XRP positions immediately. While many market participants viewed those posts as alarmist, they nevertheless appeared to contribute to fear-driven selling pressure.
Sentiment shocks can be especially damaging when they arrive during a period of technical weakness. Once confidence begins to erode, even traders who are not convinced by bearish narratives may choose to reduce exposure simply to avoid getting caught in a cascade. That dynamic seems to have weighed on XRP as the market searched for a floor.
Notably, the article pointed out that even positive net inflows into XRP spot exchange-traded funds were not enough to halt the downturn. That detail suggests that whatever supportive demand existed in the background was overwhelmed by spot selling, derivatives liquidations, and broader risk aversion.
Technical Breakdown and Heavy Short Exposure
Ryan Lee, chief analyst at Bitget, said XRP’s breakdown below major support zones was a key technical factor behind the severity of the move. In his view, the decline did not stem from a single fundamental failure. Instead, it reflected a market structure that had become increasingly vulnerable as prices slipped beneath levels that previously helped stabilize trading.
Lee said the chart now showed bearish continuation patterns and declining liquidity, both of which can intensify downside moves when sellers overpower available buying interest. In less liquid conditions, it takes less aggressive selling to produce a larger price swing, and once support is lost, the market can move quickly to test lower levels.
He identified two main catalysts behind the acceleration. First, leveraged positioning and elevated short exposure compressed price action and turned what might have been a standard pullback into a much sharper slide. Second, a broader risk-off backdrop—driven by geopolitical concerns and uncertainty around interest rates—reduced investor appetite for high-beta assets such as XRP.
Macro Pressure Favored Defensive Assets
That macro element is important in understanding why XRP underperformed. In periods of heightened uncertainty, investors often rotate toward assets they perceive as relatively safer. In crypto, bitcoin usually benefits from that hierarchy compared with smaller or more volatile altcoins. Outside crypto, gold can attract flows for similar reasons. According to Lee, this shift in investor preference added another layer of pressure on XRP as traders reassessed risk across portfolios.
The result was a market environment in which XRP faced pressure from multiple directions at once: weakening technical structure, aggressive deleveraging, negative sentiment, and macro-driven risk reduction. None of these forces alone necessarily explains the full scale of the drop, but together they created the conditions for a sharp and disorderly repricing.
What the Drop Means for XRP Traders
For now, the key takeaway is that XRP’s decline appears to be the product of intersecting technical and market-wide forces rather than a single headline shock. The move below critical support levels changed the tone of trading, while liquidations and social-media-driven fear accelerated the sell-off. At the same time, the broader weakness in crypto and the shift toward defensive assets reduced the chances of a quick rebound.
Whether XRP can stabilize in the near term will likely depend on several factors: the behavior of bitcoin and the wider crypto market, the return of liquidity, and whether buyers are willing to defend newly tested price zones. If risk appetite remains weak, XRP could continue to face pressure even if ETF-related demand stays positive. If broader market conditions improve, however, traders will be watching closely to see whether the token can rebuild support after one of its most damaging one-day declines of the year.
For a market that had already been under strain, Feb. 5 served as a reminder that sentiment, leverage, and broken technical levels can combine to produce outsized moves very quickly. XRP’s fall to $1.22 and its drawdown of nearly 45% from the January high now stand as one of the clearest examples of that dynamic in 2026.