XRP Faces Regulatory Uncertainty as Massive Sell-Off Hits the Market!

Crypto News - Posted on 07 August 2025 Reading time 5 minutes

XRP Faces Regulatory Uncertainty and Massive Sell-Off Pressure

Jakarta, August 5, 2025 — The cryptocurrency asset XRP is currently under significant pressure amid ongoing regulatory uncertainty and a massive sell-off from institutional investors. This situation has triggered a sharp price correction and heightened market concerns about the future of the Ripple-developed token.

 

Price Volatility and Market Sentiment

At the beginning of August 2025, XRP’s price dropped by more than 20%, briefly touching the US$ 2.75 level before stabilizing around US$ 2.82. The correction was driven by institutional fund outflows, coupled with liquidity pressure due to broader market declines.

According to data from CoinGecko and AInvest, XRP-related liquidations reached approximately US$ 41.4 million. Meanwhile, total liquidations across the digital asset sector surpassed US$ 900 million, reflecting significant fiscal and technical strain on the crypto market as a whole.

 

The Trigger: Regulation and ETF Uncertainty

Uncertainty escalated after the U.S. Securities and Exchange Commission (SEC) delayed its decision on the conversion of Bitwise’s XRP-included ETF product on July 22, 2025. This sudden postponement sparked new speculation about XRP’s status in the U.S. spot ETF structure.

As a result, XRP experienced a 10% decline on July 23, falling to US$ 3.18, despite no significant on-chain anomalies. The market reaction was purely driven by external factors—primarily the lack of regulatory clarity.

 

Legal Dispute: Ripple vs. SEC Still Ongoing

The legal battle between Ripple and the SEC remains a core issue. Although a U.S. court ruled in July 2023 that XRP traded on public exchanges is not a security, Ripple’s institutional sales worth US$ 728 million were still deemed a violation.

The two parties had briefly agreed on a US$ 50 million settlement—lower than the initial US$ 125 million demand. However, the judge rejected the proposal, citing the importance of a definitive ruling. To date, the SEC has not fully withdrawn its appeal, keeping regulatory tensions unresolved.

 

Whale Movements Deepen Price Correction

The sell-off was exacerbated by Ripple co-founder Chris Larsen’s move to transfer XRP worth US$ 175 million to several exchange platforms. Around US$ 140 million of that entered the open market right as XRP hit a local peak at US$ 3.60.

This move had an immediate negative impact, triggering a more than 13% price drop in just a few days. Binance data also showed that a majority of XRP’s circulating supply was in a profitable state, which led to widespread profit-taking.

 

Technical View: Key Support Levels in Focus

From a technical perspective, market analysts see the potential for a short-term rebound of up to 20%, provided that selling pressure eases. However, if uncertainty persists, the strong support zone between US$ 2.20 and US$ 2.50 is expected to be tested—serving as a crucial level to determine whether XRP can hold or decline further.

 

Long-Term Opportunity Remains

On the other hand, several fundamental factors offer hope for recovery. The resolution of the legal case, potential ETF approval, and Ripple’s ongoing infrastructure development—including its U.S. banking license application—act as positive catalysts. Should regulatory barriers ease, XRP could be repositioned as a global utility asset with a promising outlook.

 

XRP now stands at a critical crossroads. Amid legal uncertainty, institutional pressure, and shifting investor expectations, its next direction will largely depend on regulatory clarity and strategic moves from Ripple. For investors, making data-driven and thoughtful decisions remains essential in navigating this highly volatile crypto landscape.

 

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