Why Is XRP Dropping? 5 Reasons Behind the February 2026 Price Crash

XRP Current Price (Feb 25, 2026)~$1.38

XRP has dropped 62% from its all-time high of $3.65 set in July 2025, and crashed over 30% in February 2026 alone — touching a low of $1.11 before a partial recovery. This guide breaks down exactly why it’s happening and what comes next.

Quick Answer: Why Is XRP Dropping?

XRP is dropping in February 2026 due to five overlapping factors: Bitcoin’s macro-driven selloff pulling the entire crypto market lower, over $2 billion in leveraged liquidations that accelerated the decline, slowing XRP ETF inflows that had previously supported price, a critical technical breakdown below the $1.60 support zone, and historical seasonal weakness — XRP has posted losses in 7 of 11 Februarys since 2014.

None of these factors alone would have caused a 30% monthly decline. Together, they created a feedback loop that overwhelmed buyers and drove XRP to its lowest level since November 2024 — the month Trump won the U.S. election and the pro-crypto rally began. For a broader look at how XRP compares to other major tokens in this environment, see our 2026 crypto trends guide covering Ethereum, Solana, and emerging tokens.

Reason 1: Bitcoin’s Breakdown Is Dragging Everything Down

XRP is roughly 1.8x more volatile than Bitcoin. When Bitcoin falls 8%, XRP historically falls 15%. That multiplier became the defining dynamic of February 2026.

Bitcoin entered February 2026 in a precarious technical position, trading around $68,700–$68,900 and at constant risk of breaking below the psychologically critical $60,000 level. Maxime Seiler of STS Digital warned that a break below $60,000 could trigger forced deleveraging and a cascade effect across all risk assets — exactly what played out in the first two weeks of the month.

For XRP, which trades in close correlation with Bitcoin during risk-off periods, the consequence was severe. When Bitcoin ETFs saw over $2 billion in outflows in January and February combined, XRP had no independent catalyst strong enough to decouple from the broader selloff. Every Bitcoin candle down translated into an amplified move lower for XRP.

“BTC’s direction, macro stress, and derivatives positioning are likely to dictate risk appetite in the near term.” — Vasily Shilov, Chief Business Development Officer, SwapSpace

Reason 2: Mass Liquidations — “Black Sunday II”

Leveraged positions don’t just lose money — they amplify selling pressure. When they’re force-closed automatically, they generate waves of market sell orders that push prices lower regardless of underlying fundamentals.

On the weekend of February 1–2, 2026, the crypto market experienced what traders quickly labelled “Black Sunday II” — a mass liquidation event that saw $2.2 billion in futures positions force-closed in under 48 hours, with 335,000 individual traders wiped out. XRP dropped 10% to $1.58 during the weekend selloff alone, extending its weekly losses to -11.48%.

The mechanism is straightforward but brutal: overleveraged long positions get automatically liquidated when prices fall below margin thresholds, generating cascading market sell orders that push prices lower still, triggering more liquidations in a feedback loop. According to CoinGlass liquidation data, XRP-specific liquidations exceeded $150 million during the peak 24-hour period of the selloff.

The forced unwinding of leveraged longs drove selling pressure well beyond what spot market orders alone could have produced. Institutional flows reflected the sentiment shift — early 2026 had seen pauses in both inflows and outflows from XRP-linked investment products, but during the liquidation event, the absence of aggressive institutional dip-buying left XRP particularly vulnerable.

Reason 3: XRP ETF Inflows Are Slowing

ETF demand was supposed to create a permanent institutional floor under XRP’s price. In January, it did. In February, that floor cracked.

U.S. spot XRP ETFs launched in November 2025 and initially attracted remarkable institutional demand — $1.37 billion in cumulative inflows, with 43 consecutive trading days without a single outflow. In January 2026, a $48 million two-day inflow surge triggered a 12% spike to $2.40 and a short squeeze that liquidated millions in leveraged short positions.

But by February 2026, that momentum stalled. Weekly ETF inflows reached their lowest point since launch — a signal that the initial wave of institutional enthusiasm was cooling faster than the market had priced in. The pattern became clear: structural ETF flows were absorbing supply, but not fast enough to overcome macro-driven selling and distribution by long-term holders using ETF-driven bounces as exit liquidity.

Reason 4: Technical Support Has Collapsed

When key support breaks, stop-loss orders trigger automatically, generating a cascade of selling that accelerates the move lower. Charts don’t lie about where the pain is concentrated.

XRP’s technical picture deteriorated sharply when the token broke below $1.60 — the former demand zone from April 2025’s selloff that had previously arrested a similar decline. According to TradingView chart analysis, the break signalled that sellers had taken structural control, and exposed XRP to a clear air pocket all the way to the $1.00 psychological floor.

The broader technical structure is equally concerning. Since mid-2025, XRP has traded inside a long-term descending channel — a bearish pattern of lower highs and lower lows. A bearish hidden divergence formed between October 2025 and January 2026, where XRP’s price made a lower high while the RSI (Relative Strength Index) made a higher high — a signal that upside momentum was fading before the correction began. That signal flashed in early January and was followed by a nearly 30% decline.

Key resistance levels to reclaim before any sustained recovery:

Reason 5: February Is Historically XRP’s Worst Month

2026’s February has already produced a 30%+ decline — by far the worst on record for this month. Whether that means the seasonal curse has fully played out — or is still ongoing — is the key question.

Seasonal data is not a trading strategy on its own, but it becomes meaningful when it aligns with technical and fundamental weakness simultaneously. XRP’s February track record since 2014 is unambiguously poor: losses in 7 of 11 years, a median return of -8.12%, an average decline of -5%. The worst prior Februarys saw drops of 33.4% in 2014 and 22.1% in 2018. This year’s 30%+ decline is the worst February on record.

The silver lining analysts point to: the February curse may have already played out in the early-month crash to $1.11. With Binance funding rates hitting -0.028% — a 10-month low last seen in April 2025 (which preceded a rally from $1.60 to $3.65 by July) — the short-seller crowding that typically signals an imminent bounce is in place. The question is whether Bitcoin and macro conditions cooperate.

Bear, Neutral & Bull Scenarios for XRP

🔴 Bear Case

Bitcoin breaks below $60,000. XRP fails to reclaim $1.51. Price targets $1.12 (2026 lows), with extended capitulation toward $0.53 (100% Fibonacci extension).

🟡 Neutral Case

XRP consolidates between $1.26 and $1.57 for several weeks. ETF inflows continue but don’t accelerate. Recovery delayed until Bitcoin stabilizes.

🟢 Bull Case

Bitcoin rallies above $72,000. XRP breaks above $1.81 resistance, triggering a short squeeze. Path opens toward $2.35, then Standard Chartered’s $8 year-end target.

What Could Reverse the XRP Drop?

Despite the bearish short-term picture, several structural factors distinguish the current XRP downturn from prior cycles — and suggest the long-term thesis remains intact.

SEC case is permanently closed. On August 7, 2025, the SEC and Ripple Labs filed a joint stipulation to dismiss all remaining appeals, ending nearly five years of legal uncertainty. This overhang — which had suppressed XRP’s institutional appeal for years — is gone for good.

Whale accumulation is accelerating. Wallets holding over 1 billion XRP have increased aggregate holdings from 23.35 billion to 23.49 billion XRP since January 2026 — accumulating through the entire price decline. Exchange-held XRP has fallen roughly 57% from early 2025 levels, suggesting long-term holders are moving tokens off exchanges rather than preparing to sell. This is the same accumulation pattern that preceded the April-to-July 2025 rally from $1.60 to $3.65.

Ripple’s institutional infrastructure is expanding. Ripple spent over $2.4 billion on acquisitions in 2025, including the $1.25 billion Hidden Road acquisition (access to $3 trillion in annual clearing volume) and the $1 billion GTreasury deal (1,000+ corporate clients managing $12.5 trillion in payment volumes). This is not the profile of a project in terminal decline. The same diversified approach to building durable value is something we explored in our analysis of how top financial empires are structured across industries.

ETF floor remains intact — for now. XRP ETFs maintaining positive flows while Bitcoin ETFs bled over $2 billion in January–February represents a meaningful divergence. If weekly inflows stabilize above $10 million, the institutional bid under XRP remains structurally in place.

Bottom Line: Why Is XRP Dropping?

XRP is dropping because five forces hit simultaneously in February 2026: Bitcoin’s macro-driven breakdown, $2.2 billion in liquidations, slowing ETF inflows, a critical technical breakdown below $1.60, and the worst February seasonal period in XRP’s history. The result is a 30%+ monthly decline and a 62% drawdown from the July 2025 all-time high of $3.65.

The bull case for recovery rests on three pillars: the SEC case being permanently closed, whale accumulation continuing through the decline, and Binance funding rates at 10-month lows that historically precede bounces. Whether that’s enough to overcome weak Bitcoin and fading ETF inflows is the central question for March 2026.