XRP Pulls Back After Recent Highs: Is the Rally Losing Steam?

XRP briefly broke the $3.65 mark, its highest level in seven years, before sharply falling back to $3.09. This 15% correction raises questions about the strength of the rally in the context of increased volatility. Between strategic portfolio movements, speculative pressures, and lingering regulatory tensions, the market struggles to decide: is this a simple technical pullback or a signal of a deeper exhaustion?

A peak reached, then erased: a sharp return to reality

Last week, XRP briefly rekindled bullish momentum by breaking a new record at $3.65, the first time in over seven years. However, this feat was quickly overshadowed by a sharp 15% drop, bringing the crypto back to $3.09 according to CoinGecko data.

This decline fits into a general pullback movement among altcoins, with assets like Solana and Dogecoin also falling. “We observe very violent upward moves, which then lead to sharp corrections, a phenomenon less frequent in traditional markets,” explained Katie Talati, research director at Arca.

This decline comes even as the macroeconomic context appeared to offer a favorable environment for risky assets. Yet, despite a strongly expanding US money supply (M2 reached a record $22,020 billion in June, up 4.5% year-on-year), the crypto market does not react positively. Several factors explain this disconnect:

• A general exhaustion of the altcoin market after a series of rapid and violent increases;

• Quick profit-taking by investors after XRP’s new peak;

• Awaiting a Fed decision on a possible rate cut, which could unlock a new liquidity flow;

• A climate of persistent uncertainty despite the record rise in overall liquidity in the US.

According to Katie Talati, these factors create tension throughout the market. Assets like XRP become more vulnerable to technical retracements even during apparent monetary support periods.

An evolving asset: between regained credibility and popular support

The peak reached by XRP is not solely technical or speculative. It is also seen by some as a strong signal, reflecting a change in perception towards Ripple and its project. “It is a validation of everything they have implemented and defended,” said Matt Kreiser, analyst at Messari.

He points out that XRP missed the peak of the previous 2021 bull market, unlike other major altcoins. This new record thus marks a possible catch-up, supported by Ripple’s strategy to build an institutional blockchain compliant with regulatory frameworks.

In this context, XRP’s appeal to retail investors remains a key factor. According to Katie Talati, XRP “has always been a favorite among retail investors,” and this support could intensify after the resolution of the legal dispute with the SEC.

This long-running litigation, now closed, offers the asset a “de-risked” image likely to attract new buyers. However, this optimistic picture is nuanced by a sign that did not go unnoticed. Chris Larsen, Ripple’s co-founder, moved more than $140 million in XRP to exchange platforms. A move interpreted as a desire to take profits at the top, or even a signal of mistrust by players regarding the sustainability of the rally.

These contradictory dynamics open the way to several scenarios. On one hand, XRP seems to benefit from renewed momentum, supported by a loyal community base and notable regulatory progress. On the other, the selling pressure initiated by some large holders, combined with persistent volatility in the overall market, could hinder any lasting progress.