Ripple’s XRP price fell 2.7% to $2.41 on Sunday, May 11, diverging from the broader cryptocurrency market’s positive momentum, which saw Bitcoin and Solana make substantial gains. The decline was sparked by new legal uncertainties surrounding Ripple’s involvement with U.S. President Donald Trump, leading to significant profit-taking and a drop of $360 million in XRP trading volume.
Legal Backlash Resurfaces After Trump’s Support
XRP’s decline follows recent concerns triggered by Trump’s remarks, which included calling for XRP to be part of a “strategic crypto reserve” for the U.S. A miscommunication about Ripple’s regulatory status may have contributed to this controversial endorsement. Ripple had recently settled a long-running lawsuit with the SEC for $50 million, but the mention of XRP in Trump’s policy draft quickly stirred up new legal scrutiny, causing fear in the market.
The development led to a 3% drop in XRP’s value relative to Bitcoin, signaling a broader sentiment shift away from XRP. Investors in XRP became cautious, particularly as the token failed to break the $2.50 barrier, a resistance level it has struggled with over the past month.
Declining Sentiment and Derivative Market Caution
The price drop also correlates with a decrease in market sentiment, as seen in the XRP Fear and Greed Index, which dropped from 78 to 63 in just 24 hours. Social media sentiment also turned negative, according to data from CFGI.io and LunarCrush. Additionally, XRP’s Weekly Relative Strength Index (RSI) showed a sharp decline, signaling waning upward momentum.
Derivative markets reflect trader caution, with XRP’s open interest falling by 4.7%, indicating a reduction in leveraged positions as traders sought to avoid exposure amid potential volatility. The funding rate on XRP’s perpetual futures contracts turned neutral after a positive premium earlier in the week, further signaling investor uncertainty.
Support Levels and Technical Outlook
Despite the setbacks, XRP continues to find short-term support at $2.36, near the midline of the Keltner Channel, a key technical indicator. If this level holds, XRP may continue its broader bullish trend that began in late April. However, a breakdown below this support could lead to further declines toward $2.09, as traders look to adjust positions in response to evolving risks.
If XRP manages to reclaim higher levels, the next resistance is at $2.50, with a potential move toward $2.70 if market sentiment improves. However, if the current trend persists, XRP could face a deeper correction, potentially testing the $2.00 level.
Looking Ahead
The outlook for XRP depends heavily on how the legal situation unfolds. With traders cautious and the market reacting to political and regulatory concerns, XRP’s price could either stabilize or face additional downward pressure in the coming weeks.
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