XRP falls below 2 dollars: is it a "crash" or a "golden pit"?

On December 1, 2025, the cryptocurrency market experienced a widespread pullback. Among them, XRP's performance was particularly noteworthy, as its price briefly fell below $2.10, reaching a low of around $2.03, leading the daily decline compared to other major alts. Panic swept through the market, with terms like “crash” and “Bear Market” echoing everywhere. However, for investors well-versed in market cycles, the short-term drastic fluctuations in price often conceal long-term opportunities. This article will delve into why XRP's drop below $2 this time is not a problem, but rather may present a rare strategic opportunity for prepared investors.

1. Short-term price fluctuation: The dual effect of technical pullback and market sentiment

First, we must recognize that this fall is a systemic adjustment of the entire Crypto Assets market, rather than an individual predicament of XRP. Mainstream assets such as Bitcoin and Ethereum have also seen a decline of over 5%. This synchronous decline is usually driven by macro market sentiment and short-term liquidity events.

• Market rumors and sentiment impact: The drop on December 1 was partly due to an unverified “little essay” about the Federal Reserve Chairman circulating in the market, which triggered concentrated liquidations of high-leverage contracts. Coinglass data shows that over $500 million worth of liquidations occurred across the network within 24 hours, with a very high proportion of long positions being liquidated. This "long squeeze"行情 triggered by leverage liquidation has significant short-term and emotional characteristics, often quickly followed by a recovery after panic selling has cleared.
• The technical aspect of “no break, no stand”: Although the price is falling, the technical indicators have not completely turned pessimistic. Some analysts point out that a potential bullish engulfing reversal pattern is forming on the weekly chart of XRP, while its Relative Strength Index (RSI) is rebounding from historical low areas. Historically, similar technical structures have indicated months of upward trends. Additionally, another analysis mentioned that the weekly stochastic RSI of XRP has shown a bullish crossover signal in the oversold region. Therefore, the current decline can be seen as a deep test and “washout” of the key support area, laying the foundation for a healthier upward movement in the future.

2. Long-term fundamentals remain strong: Legal clouds dissipate and institutional demand rises.

The price fall is superficial, while the fundamentals are profound. Contrary to the short-term fluctuations of the technical side, XRP's long-term fundamentals have fundamentally improved in the second half of 2025.

1. End of Regulatory Uncertainty: The nearly five-year legal battle between Ripple and the U.S. Securities and Exchange Commission (SEC) has essentially come to a close. With the expiration of the SEC's appeal period, the main legal obstacles have been cleared. Under the leadership of the new SEC chair, the policy has shifted from “regulatory enforcement” to pursuing “regulatory transparency,” creating an unprecedented friendly environment for the entire crypto industry, including XRP. Although there have been recent reports that the judge rejected a specific settlement request from both sides, this is more about procedural details and does not change the core fact that the SEC has abandoned its appeal and the legal risks have significantly decreased.
2. Spot ETF Starts Institutional Bull Market Engine: This is the most important catalyst for the XRP ecosystem. The first leveraged XRP ETF in the United States was approved in July 2025, while the market is more focused on the fact that over 11 top asset management companies (such as Grayscale, Franklin Templeton, etc.) have submitted applications for spot XRP ETFs. Bloomberg analysts have given a 95% chance of approval by the end of 2025. ETFs are not just new products; they represent the formal acceptance of XRP as a compliant asset in the traditional financial world, which will bring in a massive influx of incremental funds.
   1. Supply shocks have already occurred: the effects of ETFs are reflected in on-chain data. Since the launch of ETF-related products, the XRP reserves on exchanges have decreased by about 29% within a month. For example, Binance's XRP balance has dropped to a 12-month low. This means that a large amount of liquidity is being “withdrawn” from the trading market, entering institutional custody wallets and ETF reserve pools. The reduction in supply contrasts sharply with the potential huge demand for ETF purchases. Some analysts believe that the monthly net inflows of ETFs have absorbed almost all of the net new supply released by Ripple from custody. This reversal in the supply-demand structure is the strongest logic supporting the long-term rise in prices.
3. Practicality and Ecological Expansion: With the alleviation of legal risks, Ripple's business cooperation and integration in the field of cross-border payments are accelerating. At the same time, the company is also actively expanding its connections with traditional finance, such as discussing strategies related to digital asset reserves. The healthy development of the ecosystem provides XRP with a practical foundation that goes beyond pure speculative value.

3. Investment Perspective: How to Identify Opportunities Amid Fluctuations

For investors, the key is not to predict the lowest point, but to understand the current price's position in the cycle and formulate corresponding strategies.

• Perspective of Long-Term Investors: The range of $1.40 to $1.60 has been marked by some analysts as a potential high-odds long-term speculative entry area. If the market experiences extreme pessimism that drives prices down to this range, the risk-reward ratio will be highly attractive. The core logic is that what you are buying is a long-term option of “legal risk removal + ETF supply shock + payment network application,” rather than a purely volatile token.
• Strategy for medium-term traders: The current price has experienced repeated consolidation and testing in the range of $2.10 to $2.30. Analysts point out that around $2.10 is a key recent support level. If it can stabilize above this level and break through the resistance zone of $2.24 to $2.30 with increased trading volume, it may open the path for an upward test towards $2.45 and even higher targets (such as $3.60). The trading plan should revolve around these key technical levels and strictly set risk management.
• Follow the latest data from Gate: As an active trader, it is crucial to monitor data in real time. On the Gate platform, you can access key information such as the latest price of the XRP/USDT trading pair, depth chart, hourly RSI, and funding rates, which are effective tools for assessing short-term market sentiment and the degree of leverage overheating.

Conclusion: Hearing signals in the noise

The cryptocurrency market is always accompanied by high fluctuations. On December 1, 2025, the price of XRP fell below $2, seemingly a result of market panic and leveraged liquidations, marking a “crisis.” However, penetrating through the noise of the price, what we see is: the long-standing legal clouds have dissipated, the tidal wave of spot ETFs opening up market value is approaching, and the circulating supply on exchanges is being continuously absorbed by institutions. These are clear, structural “signals.”

History has repeatedly proven that in the early stages of fundamental improvements, deep pullbacks caused by overall market sentiment or short-term events often provide the most rewarding investment windows for the future. XRP falling below 2 dollars may be a concern for short-term traders focused solely on daily charts; however, for investors who see the grand narrative of “supply shortage” and “institutional demand” taking shape behind it, this is not a problem at all, but rather a precious opportunity mispriced by market sentiment. In the world of Crypto Assets, true wisdom lies in the ability to calmly assess those unchanging, positive cornerstones when everyone else is afraid.