XRP Price Prediction: Will the Asset Continue to Trade Under Pressure?

XRP has been trading under pressure in recent weeks, losing much of the momentum it built during its late 2024 to early 2025 rally.

In recent times, XRP has been trading fiercely, losing a significant portion of the momentum it gained during its late-2024 to early-2025 rally. After surging to highs above $3.40, the asset has experienced an 18.3% downturn over the past month, a decline that can be attributed to broader market softness.

At present, XRP trades considerably below its peak at a price of $2.06, with muted investor activity and decreasing market participation across both spot and derivatives markets.

Amid XRP's decline, an analyst from CryptoQuant, known as EgyHash, has been keeping a close eye on the altcoin's on-chain trends. In a recent post titled "XRP's Market Paradox: With Ledger Activity Dipping 80%, Is a Rebound on the Horizon?" EgyHash shared his observations.

According to EgyHash, XRP's on-chain and futures market data present a mixed picture—declining activity but resilience in price.

EgyHash noted that XRP Ledger activity has fallen sharply since December, with the percentage of active addresses dropping by 80%. Similarly, open interest in the futures market has declined roughly 70% from its highs, and funding rates have occasionally turned negative. These observations suggest a decrease in leveraged activity and perhaps weaker overall market optimism.

The analyst stated that the Estimated Leverage Ratio, which measures average user leverage by comparing open interest to coin reserves, has also dropped significantly. This decline indicates that traders are generally using less leverage, which could be a response to the current market softness and heightened volatility.

Despite these indicators pointing toward weakening momentum, the altcoin's price has only declined about 35% from its peak. This is a milder correction compared to other assets such as Ethereum, which has fallen roughly 60% over the same period.

Additionally, the altcoin's Exchange Reserve has continued to decline, reaching levels last observed in July 2023. Lower reserves typically suggest that fewer tokens are available for immediate sale, a factor that can help support prices during market downturns.

According to EgyHash, this trend, along with relatively stable pricing, could indicate growing long-term confidence in the asset.

While on-chain metrics provide valuable insights, institutional developments could further strengthen market sentiment. In a move to diversify investment offerings in the crypto market, Hong Kong-based investment firm HashKey Capital recently announced the launch of the HashKey XRP Tracker Fund.

Set to be the first XRP-focused investment vehicle in Asia, the fund will be tracking the price of XRP and is backed by Ripple as the anchor investor. The initiative is designed to attract more institutional capital into the XRP ecosystem.

This venture will later transition into an exchange-traded fund (ETF), pending regulatory approval, making it easily accessible to a wider range of investors.

HashKey Capital has also hinted at the possibility of introducing tokenized investment products and decentralized finance (DeFi) solutions in collaboration with Ripple.

Highlighting the strategic value of this partnership, Vivien Wong, a partner at HashKey, noted the importance of integrating Ripple's network with regulated investment infrastructure across Asia.

This move underscores the increasing interest in cryptocurrencies among institutional players and the role of bridging the gap between traditional and digital finance.

Although the altcoin faces immense pressure in the near term, long-term developments, including decreasing exchange reserves and rising institutional interest, may support the recovery of XRP as the broader market shows signs of stabilization.