Ripple – Utility vs. sell offs: Assessing if XRP can breach $2.26

05/08/2025 05:00
Ripple – Utility vs. sell offs: Assessing if XRP can breach $2.26

Despite XRP’s proven utility in payments and network stability, rising short interest is pressuring price action.

Ripple [XRP] may boast real-world utility – from preventing network spam to serving as a bridge asset for cross-border transfers, but that hasn’t shielded it from market headwinds.

A new report has highlighted its functional value, even as the token struggles under sustained sell pressure, shedding nearly 8% over the past week.

According to a recent Bitwise report, XRP’s value isn’t just theoretical – it stems from measurable functions within the XRP Ledger.

This includes transaction fees that are permanently burned, serving as a slow but steady deflationary force; reserve requirements that help prevent network spam; and most importantly, XRP’s role as a bridge currency in cross-border payments.

Source: Bitwise Investments

It emphasized that while the burn rate and reserve mechanism are modest today, their impact could scale significantly with increased network usage.

Still, the report pointed out that XRP’s true potential lies in facilitating liquidity across a large, active ecosystem.

Mounting selling pressure undercuts the fundamentals

Despite its utility-driven valuation, XRP is facing significant short-term bearish sentiment. Data from Coinglass shows a steady decline in the Long/Short Ratio since late April, falling below 0.90 by the 6th of May.

Source: Coinglass

This shift indicates growing dominance of short positions, suggesting traders are increasingly betting against the token.

The weakening ratio shows market skepticism – even as XRP’s core use cases remain intact, speculative pressure is driving price action, not fundamentals.

XRP price outlook

XRP traded within a tight range, with price action hovering around $2.14 at press time.

The RSI was at 47.55, suggested neutral momentum, while the MACD hinted at a potential bearish crossover as the blue signal line dips below the orange.

XRP

Source: TradingView

According to Ali Martinezz, the key levels to watch are $2.00 and $2.26. A decisive daily close outside this range could set the next major trend.

With recent sell pressure and weakening momentum, a break below $2.00 may trigger further losses.

Conversely, a breakout above $2.26 could revive bullish sentiment and push prices higher.

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