XRP Stuck Between Macro Headwinds and Thin Liquidity, Analyst Warns

XRP Trapped by Macro Noise and Flow Quality, Analyst Says

XRP’s fortunes are closely tied to Ripple, the company behind its creation. Yet, despite Ripple’s recent victories—including a legal settlement with the SEC, inclusion in Trump’s proposed digital reserve, and a $50 billion valuation—XRP continues to trade at $3.65, a level 62% below its July 2023 record high.

Louis De Backer, crypto trading analyst at financial services platform Marex, attributes XRP’s struggles to two primary forces: macroeconomic uncertainty and thin liquidity.

"XRP is basically being held back by the same two forces that have capped most large-cap alts in this regime: macro noise and flow quality."

Macro Pressures Weigh on Risk Assets

De Backer’s comments come as geopolitical tensions between the US and Iran drive oil prices above $114 per barrel—the highest in four years. This surge in energy costs reduces the likelihood of central banks, including the Federal Reserve, cutting interest rates. High interest rates are widely seen as a headwind for cryptocurrencies, as they reduce appetite for risk assets.

De Backer explains:

"With energy at four-year highs and the Fed messaging more divided, risk budgets stay tight and investors default to BTC first, then ETH. In that tape, XRP tends to behave like beta—it moves with the complex but struggles to attract fresh standalone demand."

He adds that a calming of macroeconomic conditions could unlock trading opportunities for altcoins like XRP:

"If the macroeconomic environment was to calm down, that would enable traders to move beyond Bitcoin and Ethereum and start to trade with altcoins like XRP."

Thin Liquidity Limits XRP’s Rally Potential

The second constraint on XRP’s price is positioning versus spot depth. De Backer notes that when liquidity is scarce and derivatives dominate trading flows, XRP’s moves can be sharp but unsustainable. He emphasizes the need for consistent spot buying to sustain a rally:

"When liquidity is thin and derivatives flows dominate, moves in XRP can be sharp but they often fade. You need consistent spot buying to turn a push into a trend, otherwise it remains range-bound and reactive."

For XRP to break out of its current trading range between $1.35 and $1.45, De Backer says it must hold a new, higher level for an extended period.

"In short, XRP isn’t broken. It’s just stuck in a market that is still trading macro first and rewarding the deepest, most liquid exposures. When that pressure eases and spot flows show up, XRP can move quickly."

Ripple’s Recent Wins Fail to Lift XRP

Despite XRP’s struggles, Ripple has achieved significant milestones in recent months:

• SEC Settlement: Ripple ended its long-running legal battle with the US Securities and Exchange Commission.
• Trump’s Digital Reserve Proposal: Former President Donald Trump included XRP in a proposed strategic digital reserve.
• South Korea Partnership: Ripple signed a deal with one of South Korea’s largest insurance companies.
• Acquisitions: The company has expanded through strategic acquisitions.
• $50 Billion Valuation: In March, Ripple reached a $50 billion valuation—more than double the market cap of stablecoin giant Circle.
• ETF Inflows: XRP exchange-traded funds, launched in November, have seen mostly positive inflows, according to Coinglass.

Yet, not all analysts are optimistic about XRP’s ability to reclaim its past glory. Ric Edelman, founder of Edelman Financial Engines, expressed skepticism in March:

"I’m just not convinced that in this marketplace, XRP is going to succeed at regaining the stature that it once had, which is sad and unfortunate."

Short-term sentiment on Polymarket aligns with Edelman’s view, reflecting bearish expectations for XRP’s near-term performance.

What’s Next for XRP?

XRP’s path to recovery hinges on two key factors: a shift in macroeconomic conditions and a sustained increase in spot buying. Until then, analysts warn that XRP may remain range-bound, reacting to broader market trends rather than driving its own momentum.