XRP is in the midst of a strong sell-off that has now stretched across six consecutive weekly declines, leaving the token hovering around its lowest level since August. The downturn continues a trend that began in September, when XRP peaked at $1.6535, and reflects broad-based weakness across the cryptocurrency market.

Crypto Fear and Greed Index Drops Into Fear Zone

The token's steep slide comes as investors remain fearful about the crypto industry. The Crypto Fear and Greed Index has slumped to 27, deep in fear territory, after peaking at 81 a few months ago. The index runs on a 0-to-100 scale, with readings below 45 generally classified as fear and below 25 as extreme fear.

The gauge's decline has coincided with a broad retreat in Bitcoin and other altcoins. Bitcoin, which hit $87,400 in October, has fallen below $74,000. The total market capitalization of all cryptocurrencies has dropped from nearly $3 trillion to $2.47 trillion.

Sentiment worsened after last week's midterm elections, in which Americans voted for Democrats by a wide margin. Democrats broke the Republican hold on states such as Texas and Mississippi and will now control both the House of Representatives and the Senate, giving them subpoena power. Unlike Republicans, Democrats have been relatively opposed to the crypto industry — a stance exemplified by Senator Elizabeth Warren, who will chair the powerful Senate Banking Committee. The panel holds jurisdiction over banking and securities regulators and is central to any crypto market-structure legislation, making its leadership a closely watched signal for the direction of U.S. oversight.

Spot XRP ETF Inflows Fade

Data from SoSoValue shows that demand for spot XRP ETFs has dropped sharply. The funds have recorded no inflows this month, instead posting outflows of $529,000. That marks a stark contrast with the previous two months, when the funds added $18.8 million in October and $121 million in September.

Spot ETFs matter beyond headline flows because they wrap XRP exposure in a standard brokerage product, removing the need for crypto exchange accounts or self-custody. Even so, XRP funds have fared better than products tracking other major coins. Bitcoin ETFs have seen more than $1 billion in outflows this month, while Ethereum ETFs have shed over $350 million.

Falling ETF inflows are typically a sign that demand for an asset among American retail and institutional investors is waning. In most cases, coins tend to underperform the broader market when ETF demand fades. Because SoSoValue publishes flow data daily, the month-to-date figures offer a running check on whether that demand stabilizes or keeps eroding.

Long Liquidations Rise as Open Interest Falls

XRP's decline has also been driven by rising liquidations of bullish positions. Long liquidations soared to $30.3 million on Sunday, the highest level since October 8. A long liquidation occurs when exchanges forcibly close leveraged positions to prevent larger losses, and the forced selling by liquidated investors typically adds further downward pressure on the asset.

Bullish liquidations have exceeded short liquidations in recent months. The surge in liquidations has coincided with a steady retreat in XRP futures open interest — the total value of outstanding derivative contracts — a sign that demand for the token in the futures market is fading. When open interest falls alongside price, it generally points to existing positions being unwound rather than fresh capital entering the market.

Technical Pressure Builds

According to a weekly chart analysis on TradingView, XRP has already broken below the key support level at $1.2520, its low from September 14. The token has consistently traded below the 50-week Exponential Moving Average (EMA) — a long-term trend gauge traders use to separate bull phases from bear phases — a sign that bears remain in control, and has dropped to the 78.6% Fibonacci Retracement level, one of the ratio-based zones chartists monitor for potential support.

Based on these signals, the analysis suggests the token could continue falling, potentially toward the key support level at $0.9783, its September low. That bearish view would be confirmed if XRP drops below the psychologically important $1 mark.

Near-term markers to monitor include whether weekly closes hold above the $1 round number, whether spot ETF flows turn positive again in SoSoValue's daily data, and how the Senate Banking Committee's incoming leadership approaches crypto oversight.

This article provides market information, not financial advice. Cryptocurrency prices can fluctuate sharply, and technical forecasts do not guarantee returns. Readers should conduct independent research and consult a qualified financial professional before making investment decisions.