Two Reasons Why XRP Could Drop Sharply Soon

Interest in XRP is gradually decreasing, with on-chain indicators signaling a potential weak short-term performance.

With market sentiment weakening across the board, these factors suggest that XRP prices may decline further in upcoming trading sessions.

XRP Traders Retreating: 222 Million USD Outflow Signals Fear

The Estimated Leverage Ratio (ELR) of XRP on leading exchange Binance is declining, confirming the decrease in investor confidence and risk appetite. According to CryptoQuant, the ELR is currently at 0.36 — the lowest weekly close in the past month.

An asset's ELR measures the average leverage traders use to execute trades on a cryptocurrency exchange. It is calculated by dividing the asset's open interest by the exchange's reserve for that currency.

XRP's declining ELR indicates that traders' risk appetite is decreasing. This suggests investors are becoming cautious about the token's short-term prospects and avoiding high-leverage positions that could increase potential losses.

This trend is similar for spot market participants. According to data from Coinglass, XRP has recorded a negative net flow exceeding 222 million USD since 07/29/2025, showing seller dominance and weak buying pressure.

When an asset records a negative spot net flow, traders are selling their assets and taking profits, while fewer buyers are participating to replace them.

This trend could worsen XRP's current downward trend, as demand for the asset decreases while supply increases.

XRP Bears Approaching 2.71 USD—But 3.39 USD Breakthrough Still in Sight

As selling pressure increases, XRP risks dropping to 2.71 USD. If this support level does not hold, the altcoin may experience a deeper decline to 2.50 USD.

On the other hand, a breakthrough above the 3 USD price level remains possible if buying momentum strengthens. A successful move past this threshold could pave the way for a price increase to 3.39 USD.