XRP News Today: XRP Drops 5% in May 2025 Amid Regulatory Delays and Market Pressures

XRP has experienced a significant decline in May 2025, with its value dropping over 5% in the past week. The digital asset recently hit a two-week low of $2.07, as bearish sentiment took control of the market. This downturn is attributed to several key factors, including a decrease in on-chain activity, delays in regulatory decisions, and broader market pressures.

One of the primary reasons for XRP’s price weakness is the sharp drop in activity on the XRP Ledger. Daily active addresses have plummeted to just 21,000, a significant decrease from December’s highs of 108,000. This reduction in user engagement has led to weaker transaction volumes and reduced liquidity on-chain, which often translates into lower demand for the asset.

Investor confidence has also been shaken by the U.S. Securities and Exchange Commission (SEC) delaying its decision on Franklin Templeton’s spot XRP ETF proposal. The SEC has pushed its decision deadline to June 17, 2025, deferring any potential influx of institutional capital that an ETF approval might bring to XRP. However, according to the analyst's forecast, the chances of approval of a spot XRP ETF in 2025 now stands at a massive 77%.

Additionally, XRP has seen a notable decline in community discussions compared to other leading cryptocurrencies over the past three months. This reduction in social buzz has contributed to the overall bearish sentiment surrounding the asset.

Macro uncertainty ahead of the upcoming FOMC (Federal Open Market Committee) meeting has caused traders to adopt a risk-off stance. XRP, like many altcoins, has been hit hard as fears over tighter monetary policy grip the market. The FOMC meeting could severely impact Bitcoin (BTC) and the broader digital asset space.

Ripple’s launch of RLUSD, a USD-backed stablecoin designed to complement the XRP ecosystem, has had unintended consequences. While RLUSD is quickly gaining ground as a bridge currency for cross-border transactions, its emergence has cast doubt over XRP’s long-term role. Crypto market participants voiced concerns that RLUSD could marginalize XRP, especially if the stablecoin becomes the preferred asset within Ripple’s financial stack.

On the technical front, XRP’s Relative Strength Index (RSI) currently sits at 46.56, dipping below the neutral 50 zone, a signal that bears are gaining traction. Bollinger Bands show XRP trading at $2.13, just below the midline band at $2.17, with the lower band at $2.05 and the upper band at $2.29. A close below $2.05 could open the door to deeper downside, while reclaiming $2.29 would signal renewed bullish momentum.

In summary, the decline in XRP’s value in May 2025 can be attributed to a combination of factors, including reduced on-chain activity, regulatory delays, falling social buzz, broader market pressures, and the launch of RLUSD. Technical indicators suggest that XRP could slide further unless key support levels hold, making it a challenging period for investors in the digital asset.