The price of XRP has gone down, dropping approximately 10% in the past week.  The decline is blamed by analysts on poor market sentiment, economic issues, and a growing supply of tokens. Tighter regulations, lower on-chain activity, and fear of a market downturn are some of the adverse reasons why prices fell.  Since XRP fell below critical support points, investors are fearful of a lengthy loss.  On March 29, 2025, XRP is trading at approximately $2.13, having fallen by 4.73% within the last 24 hours.

Trump Tariffs and Inflation Shake Risk Appetite

One of the major reasons for the XRP sell-off is the rise in U.S. inflation. In February, inflation rose unexpectedly by 0.4%, taking the year-over-year rate to 2.8%. This will discourage the Fed from cutting interest rates in the coming months and as a result, investors will lose interest in riskier assets such as cryptocurrencies, and the US dollar’s value appreciates.

President Donald Trump’s move to impose a 25% tariff on auto imports complicated the issue further.  According to the BBC, Trump said the new tariffs will take effect on April 2. Businesses importing vehicles will face charges starting the next day, while taxes on parts will begin in May or later. Alberto Musalem, the head of the St. Louis Federal Reserve, said that the tax could add 1.2 percentage points to inflation, making the economy more uncertain.  The rising liquidation rates in futures markets show that institutional investors now do not want to hold risky assets such as XRP. 

Bearish Patterns Signal Further Declines

According to COINTELEGRAPH, the XRP price has formed a bearish triangle pattern, which suggests that if it declines below $1.96, it could fall by 40%. Senior trader Peter Brandt has also warned that a fall below this support could send the price to $1.32 by April. Brandt predicts a “textbook” head-and-shoulders collapse with a downside target of $1.07. 

In the last 24 hours, XRP had $24.89 million in liquidations, with most of it coming from traders betting on higher prices. The price fell below $2.34, dropping 7% in a day. If XRP falls below $1.96, it could keep dropping to $1.35. However, XRP might also bounce back from $1.96, as buyers have protected this level several times since December.

With reduced whale movement and static on-chain metrics, XRP has fallen 35% from its January high at $3.40, though it has enjoyed a 500% spike towards the end of 2024.  As of early March, large exchanges such as Binance and Upbit have maintained flat XRP reserves, an indicator that presents little incentive for building up or shedding.

Regulatory and Supply-Side Pressures

Although the SEC dropped its lawsuit against Ripple, XRP prices didn’t increase, probably due to investors already anticipating this. Based on Coinglass data, XRP’s derivatives open interest is gradually increasing, from a monthly low of 1.35 billion XRP to 1.75 billion XRP.  Yet, if demand fails to rise in the coming days, supply-side pressures may lead to further declines. Ripple will unlock 1 billion XRP out of escrow every month, with approximately 33% being introduced to the market. This has contributed to the circulating supply, which increased from 54 billion to 58 billion XRP over the last year.

Open interest in XRP futures increased from 1.35 billion XRP to 1.75 billion XRP in March, indicating a rebound. But hopeful traders are losing ground, as evidenced by the $24.89 million in reported liquidations over the past day, of which $23.63 million came from long holdings. More bearish momentum is indicated by XRP’s 50-day EMA heading lower, even though the 200-day EMA is still a solid support level. According to the Relative Strength Index (RSI), which is currently at 49.27, the market is bearish yet neutral.

Despite the bearish signals many experts are optimistic about XRP. As per Hani Abuagla, a professional at XTB, the price of XRP will double, between $100 and a conservative $5. Ripple’s technological progress in cross-border payments as well as speculation that President-elect Donald Trump’s government will loosen regulations on virtual currencies are responsible for the positive sentiment.