XRP is hovering at a critical price point after falling 2.51% to $2.14, reflecting growing unease across the crypto market.
The drop comes amid a steep market-wide pullback on June 6 that erased nearly 5% from the total capitalisation of digital assets.
Source: CoinMarketCap
Fuelled by an escalating political standoff between President Donald Trump and Tesla CEO Elon Musk, investors have begun exiting longer positions in favour of short-term trades.
XRP, with its high liquidity, was among the hardest hit, and current chart patterns suggest further declines if the support at $2.07 fails to hold.
Trading volume jumps 80% as open interest slides
XRP’s 24-hour trading volume surged to $2.97 billion, marking an 80% increase. This coincided with a 3.7% drop in open interest, according to data from CoinGlass.
The combination of high volume and falling open interest indicates an exodus of leveraged long positions. Traders are shifting to short-term plays as uncertainty intensifies.
Technical indicators are confirming the trend. The token has slipped below its 20-day moving average and is now trading near the lower Bollinger Band at $2.07.
This level has acted as support in the past, and a decisive break could accelerate losses.
The relative strength index (RSI) stands just under 40, signalling weak buying momentum without yet reaching oversold territory.
MACD remains negative, adding to bearish pressure, while stochastic RSI and other short-term oscillators show neutral readings.
The 10-day through 100-day moving averages are all sloping downward, with the 200-day EMA at $2.08 emerging as the next key level for bulls to defend.
Political tensions rattle investor sentiment
The broader market downturn was driven by political friction at the highest levels of US leadership.
On June 5, tensions escalated between Trump and Musk.
Musk’s criticism of the administration’s new federal spending bill was met with retaliation from the Trump adminstration.
The spat intensified further when Musk publicly linked Trump to Jeffrey Epstein case files, calling for his impeachment.
Trump responded by saying Musk had “gone crazy.”
Following the clash, Tesla shares tumbled 14%.
The political fallout has unnerved investors, who see increasing uncertainty around federal policy and business continuity.
Cryptocurrencies, already prone to volatility, were quick to reflect the shift in sentiment.
Legal and institutional drivers remain in play
Despite the pullback, investors are watching June 16 closely. That’s when a major development is expected in the long-running Ripple v SEC lawsuit, which has been a significant overhang for XRP.
A potential settlement could resolve years of regulatory ambiguity and lift sentiment.
In parallel, corporate and institutional demand for XRP is on the rise.
VivoPower recently announced it had added $121 million worth of XRP to its treasury, while Chinese firm Webus International said it would allocate $300 million to XRP reserves.
Nasdaq-listed Hyperscale Data’s subsidiary, ACG, also plans to acquire up to $10 million worth of XRP by the end of 2025.
Meanwhile, multiple XRP ETF filings await regulatory approval. Bitwise, Grayscale, and others have submitted applications, with Franklin Templeton’s decision due on June 17.
A favourable outcome could further legitimise XRP in the eyes of traditional investors and improve demand in the medium term.
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