During the past several years, cryptocurrency has become a leading alternative investment thanks to the rising popularity of Bitcoin. Bitcoin’s influence within the crypto realm has propelled a number of other protocols, such as Ethereum, Solana, and Cardano, into the spotlight as well.
Beyond these mainstream cryptocurrencies, however, lie more subtle opportunities. During the past few months, the price of XRP(CRYPTO: XRP) might suggest that investors have found their latest intrigue in the crypto market.
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After hitting an all-time high back in January, XRP recently started to retreat. Now, with its price about 46% off its all-time high, could investors be looking at an opportunity to buy the dip in XRP?
Let’s take a look at what XRP’s historical price trends show and, from there, assess whether the current sell-off could be a lucrative buying opportunity.
Many cryptocurrencies don’t actually offer a solution to a tangible problem. Rather, similar to how the equity market contains speculative opportunities, such as penny stocks, the cryptocurrency landscape is filled with tokens that may garner a lot of hype but don’t actually provide any legitimate utility.
XRP is different. The cryptocurrency was created by the financial technology company Ripple as an alternative to legacy payments systems. For example, businesses that wire payments to other countries and different currency denominations often need to go through intermediaries. As a result, sending payments can take several days and be costly due to wire fees and foreign exchange charges.
XRP was created to mitigate these bottlenecks, offering consumers and businesses alike a less expensive and faster mechanism for sending payments. Although XRP has proven a product-market fit for its solutions, its recent price hasn’t necessarily been moving based on anything related to its usage or adoption rates.
Image source: Getty Images.
I believe there are two related things that have been at the center of XRP’s price volatility during the last several months.
First, after Donald Trump’s presidential election win in November, XRP’s price started going parabolic. Trump vocally supported the crypto industry throughout his campaign. I suspect that crypto enthusiasts expected the Trump administration would implement changes to the regulatory environment, which could potentially be a positive tailwind for the asset class as a whole. But for XRP specifically, Trump’s support of cryptocurrency likely fueled some additional optimism over the outcome of the Securities and Exchange Commission (SEC) lawsuit against Ripple. The agency sued the company in 2020, accusing it of selling unregistered securities when it sold XRP coins to investors.
After Trump’s inauguration, the administration created a Digital Asset Stockpile. Moreover, the SEC recently dropped its appeal of an adverse ruling in the suit against Ripple.
While both of these events would seemingly be viewed as major catalysts for XRP, its price has actually been steadily declining since March.
The graph below illustrates the price of XRP over the past several years.
XRP Price data by YCharts.
What I notice in these trends is that XRP’s price tends to retreat for long periods after fleeting surges. For example, in 2018, XRP’s price soared to new highs, only to crater shortly thereafter and remain depressed for a couple of years.
Then, in 2021, XRP’s price showed some signs of new life and rebounded pretty sharply on multiple occasions. In each case, its price eventually fell back and hovered around prior lows for a while.
The most noticeable price surges from the graph above can be seen in late 2024 and early 2025. As I alluded to above, these periods coincide with Trump’s presidential election victory and his inauguration. I think the narratives surrounding Trump’s reelection and the potential for the administration to bring sweeping changes to the crypto landscape, as well as Ripple’s positive news from the SEC, were already priced into XRP several months ago. Hence, the positive sentiment surrounding these outcomes hasn’t been enough for XRP to sustain its new highs.
While historical trends do not guarantee future outcomes, I think it’s more likely than not that XRP could continue falling from its current levels. The data above does not inspire confidence, and for these reasons, I would shy away from XRP, given the uncertainty of where its price could move and settle from here.
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Adam Spatacco has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.
Down 46% From Its All-Time High, Is Now a Good Time to Buy the Dip in XRP (Ripple)? Here Is What History Suggests Could Happen Next. was originally published by The Motley Fool
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