XRP Plunges 26% Amid Trade Tensions: Market Struggles as Bitcoin and Dogecoin Also Crash

On February 3, XRP faced a dramatic 26% drop in just 24 hours, sinking to $2.12, marking its lowest price since December 31. This steep decline is part of a broader sell-off in the cryptocurrency market, influenced heavily by U.S. trade tensions and ongoing economic concerns. Alongside XRP, Bitcoin (BTC) saw a 6.8% drop, falling to $94,290, and Dogecoin (DOGE) crashed by 15% to $0.27. Analysts are left debating whether this is just a temporary correction or the beginning of a deeper bearish shift.

The Crash: Trade Wars and Market Fear

The latest slump in the cryptocurrency market can be traced back to President Donald Trump’s February 1 announcement of new tariffs on China, Canada, and Mexico, set to take effect on February 4, 2025. This announcement created significant uncertainty and rattled global markets, leading to sharp reactions across assets, including cryptocurrencies.

Cryptocurrencies, traded 24/7, quickly mirrored the broader market’s panic, with XRP reaching an intraday low of $2.51 on February 4. This marked a significant fall from its previous levels, and its market cap dropped to $150 billion. Analysts like Timothy Sykes have pointed to the increased weekend trading volatility and growing fears of a “wrecked” U.S. stock market. Furthermore, pseudonymous trader DonAlt warned of further selling pressure into the following week.

AI Predicts the Downturn: XRP Price Patterns Revealed

Interestingly, The Coin Republic’s AI-powered analytics platform had already predicted the downturn days in advance, with its XRP price prediction on January 28, pinpointing a potential downturn. According to the AI model, the weakening momentum near the $3.20 resistance level triggered a price pullback. The RSI (14-day) was at a 78, signaling overbought conditions. The model forecasted a retracement to a range between $2.50 and $2.90, which, on February 4, aligned with XRP’s fall to $2.12.

The AI now suggests that consolidation near $2.50 might be a precursor to a potential rebound, but this is contingent on XRP holding support at $2.10–$2.50.

XRP Price Prediction: Bullish Rebound or Bear Trap?

XRP’s price chart shows a remarkable rise in January, climbing from below $2.40 to a monthly high of $3.30. However, this has been followed by a sharp pullback to $2.12. Analysts categorize this as a “technical correction” within a broader uptrend. The $2.10–$2.50 range is now seen as a liquidity zone, with $2.10 serving as critical support.

The Coin Republic’s AI analytics report suggests that the $3.00 level remains a significant overhead resistance, with a close above $3.20 required to confirm bullish momentum. Failure to maintain support at $2.10 could lead to a drop to $1.63–$2.17, according to historical imbalance zones.

Sector-Wide Stress: Ethereum and Bitcoin Also Struggling

XRP is not alone in its struggles, as the broader crypto market is facing stress from global economic factors. Other major cryptocurrencies are also experiencing sharp declines. Ethereum (ETH) fell 8%, dropping to $2,944, while Solana (SOL) lost 7.3%, slipping to $202.90. Bitcoin briefly dipped below $95,000, adding to the sector-wide concerns. Even as Ripple continues its efforts to resolve its ongoing SEC lawsuit, positive developments are overshadowed by the broader market stress.

With trade tensions taking center stage, cryptocurrency investors are bracing for more volatility, with analysts keeping a close eye on potential support levels and price action in the coming days.