XRP Plummets to Lowest Valuation in Over a Year

Despite a series of positive regulatory developments for Ripple Labs, its associated cryptocurrency XRP has collapsed to a price level not seen since November 2024. On February 5, the digital asset breached the crucial $1.60 support level, at one point testing the $1.30 mark. This dramatic decline raises significant questions about the token's market dynamics and its apparent decoupling from corporate news.

During the latest broad market sell-off, XRP emerged as one of the poorest performers among major cryptocurrencies. Data from the CoinDesk 20 Index reveals that while the overall market declined by 6.6%, XRP posted a loss of 12.2%. Intraday, the token's value fell by more than 20%, sinking below the $1.60 threshold—a level that had previously attracted buyer interest as recently as April.

Currently trading at $1.33, XRP sits at a 52-week low. Technical analysis indicates a concerning lack of established historical support zones between the current price and the psychologically critical $1.00 level. This vulnerability is reflected in options markets, where traders are positioning for either further losses or sustained volatility.

Regulatory Wins Fail to Impress the Market

Ironically, the price slump coincided with Ripple announcing another regulatory milestone. On February 3, the company secured a full Electronic Money Institution (EMI) license from Luxembourg's financial regulator. This authorization permits Ripple to offer payment services across the entire European Union.

This follows closely on the heels of Ripple obtaining both an EMI license and a crypto registration from the UK's Financial Conduct Authority (FCA) in January. The firm now boasts over 75 global licenses and is considered one of the most heavily regulated entities in the digital asset sector.

Should investors sell immediately? Or is it worth buying XRP?

The Core Issue: A Disconnect from Corporate Growth

The stark contrast between corporate progress and token performance highlights a fundamental problem: Ripple's business expansion does not inherently drive demand for XRP. Many of its licensed payment services, including cross-border transfers and treasury management, can operate without utilizing XRP as a settlement currency.

Ripple has aggressively built out its infrastructure through billion-dollar acquisitions, including the $1.25 billion purchase of prime brokerage firm Hidden Road, the $1 billion acquisition of treasury platform GTreasury, and the $200 million deal for stablecoin payments provider Rail. While these moves solidify Ripple's position as an infrastructure provider, they do not mandate the use of the XRP token within their operations.

ETF Support Shows Cracks

Even the U.S. spot XRP ETFs, launched in late fall 2025, are no longer providing a reliable foundation. Although these funds had accumulated net inflows of $1.37 billion by mid-January, a massive single-day outflow of $93 million occurred on January 30. This reduced total inflows to approximately $1.17 billion.

While institutional infrastructure continues to develop—for instance, crypto custodian Hex Trust expanded its partnership with the Flare blockchain to offer institutional clients access to FXRP, a DeFi-enabled version of XRP—these advancements have been powerless to counteract the prevailing selling pressure.

A Crucial Test at $1.00

XRP now faces a critical juncture. The coming weeks will determine whether the psychological support at $1.00 will hold or if the token will continue its descent. Until the fundamental question regarding XRP's utility within Ripple's core business model is resolved, positive regulatory news alone is unlikely to be sufficient to reverse the current downward trend.