XRP's steep decline raises fears of a deeper crypto market crash
XRP has faced a sharp decline in early 2026, dropping alongside a broader crypto market downturn. The digital asset now trades at around $1.42, with weak technical signals pointing to further downward pressure. Analysts suggest a steep fall to $0.50 remains unlikely in the near term but could occur under extreme conditions.
The recent slump in XRP follows Bitcoin's drop below $70,000, which triggered over $2 billion in liquidations across crypto markets. Leveraged positions in XRP suffered heavy losses, adding to the downward momentum. Since November 2025, XRP ETFs had attracted strong inflows, reaching over $1 billion. But by January 2026, the trend reversed.
On January 7, the first net outflow of $40.8 million ended a 36-day streak of positive inflows. By January 29, volatility increased, with Grayscale's XRP ETF (GXRP) seeing a $98.39 million outflow, while Bitwise's XRP ETF recorded a $2.41 million inflow. Overall, net inflows stood at $1.17 billion, but the shift signalled cooling institutional demand.
A drop to $0.50 would mean a 65% decline from current levels. Such a move is considered a low-probability event, with a 5% chance in the short term and 12% to 15% over six to twelve months. For this to happen, XRP would need to break through multiple support levels amid a severe market crash. Potential triggers could include a Bitcoin collapse, harsh regulatory action against XRP, or a major liquidity crisis.
XRP's current price sits at $1.42, with technical indicators suggesting continued weakness. While a fall to $0.50 is not impossible, it would require extreme market conditions. The asset's performance will likely depend on broader crypto trends and institutional demand in the coming months.
