XRP Faces Strong Selling Pressure in May 2025: 5 Reasons Leading to a Deep Price Drop

In the early days of May 2025, the digital currency XRP is under severe bearish pressure, losing more than 5% of its value in just one week. The latest price has fallen to a two-week low of 2.07 USD, indicating that the downward trend is clearly dominant. Adding to the pessimistic sentiment of investors, cryptocurrency analyst Ali Martinez recently posted on social media X (formerly Twitter) that the TD Sequential indicator on the 3-day chart of XRP has signaled a sell – a sign that prices are likely to continue their downward adjustment in the short term. Here are the 5 main reasons why XRP is experiencing a serious bearish trend:

1. Decrease in Activity on XRP Ledger One of the main reasons leading to the current selling pressure is the significant drop in activity on the XRP Ledger network. The number of daily active addresses has fallen to 21,000, a sharp decrease from the peak of 108,000 last December. The decline in user interaction levels often leads to weak trading volume and poor liquidity, thereby reducing the natural demand for XRP.
2. Delayed ETF Approval Causes Investor Loss of Confidence Investor confidence is also wavering as the U.S. Securities and Exchange Commission (SEC) continues to delay its decision on Franklin Templeton's XRP ETF proposal. The agency has pushed the deadline for a decision to June 17, 2025. This delay prolongs the waiting time for potential institutional capital, which could flow into the market if the ETF is approved. However, according to the prediction platform Polymarket, the likelihood of the XRP ETF being approved this year remains high at 77%.
3. Decrease Social Media Attraction Santiment's bi-weekly report shows that the level of discussion around XRP on social media is falling, especially compared to other major cryptocurrencies like BTC, ETH, or SOL. The decline in community interest is a negative signal, indicating that XRP is gradually losing its position in the eyes of retail investors.
4. Market Pressure Broader Ahead of FOMC Meeting The uncertainty surrounding monetary policy ahead of the Federal Open Market Committee meeting (FOMC) has caused many traders to adopt a "risk-averse" strategy. XRP – like many other altcoins – is heavily impacted by the fear that the Fed may continue to tighten monetary policy. The FOMC meeting will take place today, and the results from the meeting could cause significant volatility across the entire cryptocurrency market, especially BTC and altcoins like XRP.
5. The Launch of RLUSD Raises Concerns About the Role of XRP Ripple recently launched RLUSD, a stablecoin backed by USD aimed at serving their global financial ecosystem. While the goal of RLUSD is to support and complement XRP, the rapid development of this stablecoin has raised concerns that the role of XRP may be overshadowed. In the context of RLUSD gradually becoming the main intermediary asset in cross-border transactions, some analysts are concerned that XRP may be sidelined from the main ecosystem that Ripple is building. Technical Analysis: Short-Term Trend of XRP The RSI index (Relative Strength Index) is currently at 46.56, below the neutral threshold of 50 – a sign that the sellers have the advantage. According to Bollinger Bands, XRP is trading at 2.13 USD, below the midline (midline) at 2.17 USD. If the closing price falls below 2.05 USD, XRP may extend its downward trend further. Conversely, if it breaks through the resistance level of 2.29 USD, the market may return to an upward trend.

Summary: With a series of negative factors from macro to internal network, combined with not very positive technical signals, XRP is at risk of continuing to adjust in the short term. Investors should closely monitor the developments from the FOMC meeting as well as the market's reaction to RLUSD to reassess their investment strategy.