Why did XRP fall in May 2025? Here are 5 key reasons

Table of contents

• Five reasons why XRP price falls
• 1. XRP ledger activity declines
• 2. ETF delays weaken investor confidence
• 3. Social popularity declines
• 4. Broader market pressure on the eve of the FOMC meeting
• 5. Ripple's attention to RLUSD has sparked doubts about XRP
• Technical analysis, what is the next step for XRP?

XRP faces new bearish pressure in May 2025, down more than 5% in the past week alone. The digital asset has recently dropped to a two-week low of $2.07 as bearish sentiment controls the price movement of XRP.

In a recent post on X (formerly known as Twitter), cryptocurrency analyst Ali Martinez pointed out that in addition to a cautious outlook, the TD sequence indicator on XRP's 3-day chart has sent a sell signal, suggesting a further correction in price.

There seem to be many factors that cause XRP’s current price decline. Here are five main reasons for the decline in the price of this digital asset.

Five reasons why XRP price falls

1. XRP ledger activity declines

The main reason for the continued weakness of XRP prices is the sharp decline in activity on XRP ledgers. The number of daily active addresses has plummeted to only 21,000, a sharp drop from the high of 108,000 in December.

The decline in user engagement is directly related to the decline in transaction volume and the decline in on-chain liquidity. A decrease in network activity usually means a decrease in demand.

2. ETF delays weaken investor confidence

The U.S. Securities and Exchange Commission’s decision to postpone the Franklin Templeton XRP spot ETF proposal has also affected investor confidence. The SEC has postponed its decision deadline to June 17, 2025.

The postponement delays any potential institutional capital inflows that ETF approval may bring to XRP. However, according to Polymarket data, the probability of the XRP spot ETF being approved in 2025 is currently as high as 77%.

3. Social popularity declines

In its biweekly report, Santiment noted that XRP has dropped significantly in community discussions over the past three months compared to other leading cryptocurrencies.

“It’s interesting that the overall level of discussion about XRP (relative to other top cryptocurrencies) has been steadily declining over the past three months,” he said.

4. Broader market pressure on the eve of the FOMC meeting

Macro uncertainty ahead of the upcoming Federal Open Market Committee (FOMC) meeting has led traders to take a risk-haven stance. XRP, like many altcoins, has suffered as hard afflicted by market concerns about tightening monetary policy.

The FOMC meeting, scheduled to take place later today, could have a serious impact on Bitcoin (BTC) and the broader digital asset sector.

5. Ripple's attention to RLUSD has sparked doubts about XRP

Ripple has launched RLUSD, a US dollar-backed stablecoin designed to complement the XRP ecosystem, but with unexpected consequences.

Although RLUSD is rapidly rising as a bridge currency for cross-border transactions, its emergence has also raised questions about the long-term role of XRP. Cryptocurrency market participants are concerned that RLUSD may marginalize XRP, especially as XRP becomes the preferred asset in the Ripple financial system.

Technical analysis, what is the next step for XRP?

From a technical point of view, the relative strength index (RSI) of XRP is currently 46.56, breaking below the neutral 50 area, which indicates that the bears are gaining momentum.

Source: TradingView

Meanwhile, the Bollinger Band shows that XRP trades at $2.13, slightly below the mid-line $2.17, the lower track is $2.05 and the upper track is $2.29. A close below $2.05 could lead to a further decline in XRP, while a rebound to $2.29 heralds a new bullish momentum.

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