XRP continues to fall despite positive signals from Ripple: What is the reason?

Despite continuously receiving positive news such as the upcoming launch of the XRPL EVM mainnet and the integration of the USDC stablecoin, the price of XRP has plummeted by 6.5% in just the last three days. Technical indicators like RSI and DMI are emitting initial signals of a potential trend reversal, yet the exponential moving averages (EMA) still maintain a negative outlook. Next Monday will be a decisive moment, as Ripple and SEC enter their final opportunity to reach a settlement agreement. If unsuccessful, this protracted legal battle could extend into 2026, continuing to cast a shadow over XRP's short term prospects.

XRP expands utility, but price remains stagnant ahead of important legal deadline

Despite Ripple continuously receiving a series of positive signals, the price of XRP has still not been able to capitalize on that momentum - dropping by as much as 6.5% in just the past three days. This disappointing trend occurs even as Ripple's leaders confirm that the XRPL EVM sidechain will officially launch on the mainnet in Q2/2025 - an important milestone that will bring Ethereum-compatible smart contracts to the XRP Ledger. At the same time, many businesses have also begun to accumulate XRP as part of their digital asset reserve strategy.

In addition, Circle has just announced the launch of the native USDC version on XRPL, marking a significant advancement in practical application, opening up the potential for widespread use in the field of decentralized finance (DeFi), cross-border payments, and global trading solutions.

However, the market sentiment remains cautious. All eyes are focused on next Monday — the final deadline for Ripple and the U.S. Securities and Exchange Commission (SEC) to reach a settlement in the years-long lawsuit. This could be a crucial turning point shaping the future of XRP in the near term.

After an unsuccessful attempt in May, Ripple and the SEC once again submitted a request to amend the groundbreaking ruling regarding the determination of whether XRP is a security. However, legal experts remain cautious, even skeptical about the likelihood of success for this proposal.

Many opinions suggest that the new petition lacks weight, almost failing to provide convincing arguments to change Judge Torres' viewpoint in the previous ruling. If it continues to be dismissed, Ripple may still be prohibited from selling XRP to retail investors, and this legal case risks dragging on until 2026.

Despite receiving some positive signals from the legal front and the strong development of the infrastructure ecosystem, XRP is still stuck between optimistic news and a dismal price action – a paradox that indicates market sentiment remains cautious.

XRP Momentum Shift: RSI and DMI Signal Potential Reversal

The relative strength index (RSI) of XRP has risen to 43.56, significantly higher than the 28.24 level just two days ago. RSI is an indicator that measures the speed and change of recent price movements, typically ranging from 0 to 100.

A reading below 30 indicates that an asset is being oversold, while a reading above 70 indicates the potential for being overbought.

The fact that XRP has moved out of the overbought zone and into the mid 40s indicates that momentum is showing signs of change, signaling that buying power is gradually returning – although it has not yet reached the threshold to confirm an uptrend.

The ADX index (Average Directional Index) – measures the strength of a trend regardless of its direction – has risen from 18.84 to 26.47, surpassing the important threshold of 25 – a level often considered the starting point for a strong trend.

At the same time, the +DI ( indicator for upward direction has increased from 10.56 to 15.57, while the -DI ) indicator for downward direction has sharply decreased from 36.77 to 23. This indicates that the upward pressure is increasing while the selling pressure is gradually decreasing.

If this momentum continues and the ADX continues to rise, XRP may be preparing for a trend reversal towards the upside.

EMA remains negative, but XRP is targeting the breakout level of $2.28

The exponential moving averages (EMA) of XRP continue to show a negative trend, as the short-term lines remain below the long-term lines — a clear signal indicating that the bears are in control of the market.

However, recent price movements indicate that investor sentiment may be gradually changing. If XRP maintains its current recovery momentum and successfully breaks through the key resistance zone at $2.28, it could open up opportunities for the price to move towards the next target area around $2.33.

Such a breakout will be an important technical indicator, showing that buying pressure is returning and an upward trend may be re-established.

Nevertheless, this positive outlook still needs to be monitored carefully. If XRP fails to break through the upper resistance area and faces profit-taking pressure, the price could reverse and retreat to the support area around $2.05, disrupting short term recovery expectations.

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