In a surprising turn of events, XRP, the Ripple-backed cryptocurrency, has failed to maintain the rally ignited earlier today following a key announcement by President Donald Trump.
Trump had revealed plans to include XRP, alongside Bitcoin (BTC), Ethereum (ETH), Solana (SOL), and Cardano (ADA) in a strategic crypto reserve in the United States. The announcement triggered a wave of upside movement in the market with XRP surging by almost 30% to peak at $2.95.
However, the price has come crashing down, as XRP lost over 10% of its accumulated gains. At the time of writing, XRP traded at $2.48, reflecting a 10.48% decline in the last 24 hours. The sudden decline has sent unrest across the XRP community as investors worry about the long-term rally sustainability.
Also Read: Here is What Trump’s Crypto Reserve Means for the XRP Community
XRP daily price: Source: Coinmarketcap
Why XRP Price Crashed Suddenly
The sudden decline in the XRP price was attributed to increasing whale sell-off. According to a report by Miles Deutscher, a prominent analyst in the crypto community, XRP has experienced heightened offloading at record levels over the last day.
Deutscher highlighted that large holders have aggressively dumped large portions of their holdings following the 500% XRP surge since November 2024. Recall that XRP jumped from a low of $0.5 to almost $3.4, triggered by Trump’s election victory and former SEC chairman Gary Gensler’s resignation announcement.
Deutscher stressed that the current XRP trend represents a distribution phase, where large holders liquidate their positions, resulting in a notable price decline within a short time.
$XRP whales are unloading at record levels! 👀
Large holders have been aggressively selling since the price rallied over 500% from November.$XRP seems to be in a local distribution phase right now. pic.twitter.com/NgaOoiZkWX
— Miles Deutscher (@milesdeutscher) March 3, 2025
On-chain records reveal that over $120 million worth of XRP was liquidated within the last 24 hours, underscoring the weight of the distribution. It is important to note that sales of this magnitude can have a ripple effect on smaller investors, possibly leading to a wider sell-off forcefully driving down the price of the asset.
Doubts About an XRP Reserve Coming to Fruition
Despite the reception recorded after the announcement of XRP in the strategic crypto reserve, investors are beginning to nurture doubts about the possibility of the reserve coming to pass.
Shortly after, some critics from the political landscape expressed their concerns, questioning whether it is wise to invest taxpayers’ money in volatile assets such as cryptocurrencies. Others who are more receptive to the idea voiced concerns about including altcoins such as XRP as opposed to focusing the reserve on Bitcoin alone.
Additionally, questions have been raised about how the reserve would be set up, and if there would be the need for Congress to get involved. The uncertainties and lack of clarity surrounding the proposed reserve have raised doubts among investors, watering down the initial excitement that led to the previous surge.
Ultimately, regardless of the doubts and negative sentiment surrounding XRP, its role as a key player in the crypto landscape has been underscored by its consideration in a national crypto reserve. Investors will continue monitoring key events and how XRP reacts in the coming days.
Also Read: Ripple (XRP) Rockets by 20%, Here is Why the Coin is Rising Today
