XRP Price Analysis: Paul Atkins “Conflict of Interest” Sparks $220M Withdrawals

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The XRP price has struggled to sustain bullish momentum above the critical $2.00 mark, slipping below this psychological level before recovering slightly to trade around $2.15. Despite a recent legal win for Ripple in its long-standing battle with the SEC, growing regulatory uncertainty has cast a shadow over market sentiment. At the center of this turbulence is Paul Atkins, the Trump-nominated candidate for SEC Chair, whose potential conflict of interest concerns have triggered a wave of investor caution—and over $220 million in derivatives withdrawals in just ten days.

This article explores the key factors influencing XRP’s current price action, analyzes market structure shifts, and evaluates short-term price forecasts—all while addressing investor concerns about ETF prospects and regulatory risks.

Why Is XRP Price Dropping?

The latest downturn in XRP’s value is closely tied to rising political and regulatory uncertainty surrounding Paul Atkins’ nomination as the next SEC Chair. While Atkins is widely seen as a pro-crypto figure with deep experience in financial regulation, his candidacy has faced mounting opposition in Congress over alleged conflicts of interest.

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Critics argue that his past affiliations may compromise impartial oversight, especially as the SEC continues reviewing high-stakes applications—including potential spot XRP ETF filings. Although Ripple recently secured a favorable ruling limiting the SEC’s enforcement scope, the broader regulatory landscape remains fragile.

Market participants are now questioning whether a more hostile SEC leadership could emerge if Atkins’ nomination fails. Such an outcome might delay or block key crypto initiatives like altcoin ETF approvals and the proposed Crypto Strategic Reserve, a federal program aimed at acquiring digital assets.

Investor Confidence Wanes Amid ETF Odds Decline

One of the clearest signals of weakening confidence comes from prediction markets. According to Polymarkets data, the probability of a spot XRP ETF being approved by July 31, 2025, has dropped to 35%—a 7 percentage point decline since scrutiny over Atkins intensified.

This drop reflects growing skepticism about near-term regulatory support for institutional crypto products. A spot ETF would significantly boost XRP’s legitimacy, enabling easier access for pension funds, asset managers, and retail investors through traditional brokerage platforms.

Without such approval, institutional adoption faces hurdles. Many large investors remain on the sidelines, waiting for clearer regulatory frameworks before committing capital. The fear is that any delay could stall momentum not just for XRP, but across the entire altcoin ecosystem.

$220 Million Exit From XRP Derivatives Markets

Beyond spot trading, the most alarming development lies in the derivatives market. Data from CryptoQuant reveals a sharp decline in XRP’s open interest—from $1.6 billion on March 19 to $1.48 billion at press time. This $220 million reduction in futures positions over ten days signals a significant loss of trader confidence.

Open interest measures the total number of outstanding derivative contracts and serves as a barometer for market engagement. A falling open interest during a price correction typically indicates that traders are closing positions rather than initiating new ones—often a precursor to extended bearish pressure.

The chart below illustrates this downward trend in open interest, reinforcing concerns that short-term optimism has waned.

When open interest drops alongside declining prices and low trading volume, it suggests weak demand and a lack of buyers stepping in to absorb sell-offs. This combination increases the risk of further downside, especially if negative news continues to dominate headlines.

Technical Outlook: Will XRP Rebound or Break Down?

As of now, XRP trades at approximately $2.17, struggling to regain traction above key moving averages. On the daily chart, resistance looms at:

Sellers remain in control, and trading volume has dwindled—another sign of tepid buying interest. The Balanced Bollinger Percentage (BBP) indicator sits at -0.3190, confirming sustained downward pressure within the Bollinger Bands framework.

Bearish Scenario

If XRP fails to reclaim the $2.20** support level, the next major target could be **$2.00. A break below this psychological floor might trigger panic selling, potentially accelerating losses toward $1.80.

Historically, such levels have acted as both support and sentiment gauges. A sustained drop below $2.00 could erode retail confidence and prompt further deleveraging across exchanges.

Bullish Recovery Potential

Conversely, a decisive breakout above $2.41** would invalidate the current bearish structure and reopen the path toward **$2.60—a level aligned with the 100-day SMA. Such a move would likely require strong volume support and positive regulatory developments, such as progress on ETF filings or Atkins’ confirmation.

Until then, sideways consolidation or gradual decline appears more probable.

Frequently Asked Questions (FAQs)

Q: What’s causing the recent drop in XRP price?
A: The decline is primarily driven by regulatory uncertainty surrounding Paul Atkins’ nomination as SEC Chair. Concerns over conflicts of interest have dampened investor sentiment and raised fears of delayed crypto legislation and ETF approvals.

Q: Could an XRP spot ETF still be approved in 2025?
A: Current prediction markets assign a 35% chance of approval by July 31, 2025. While not impossible, odds have declined due to political headwinds and uncertainty around SEC leadership.

Q: How much has been withdrawn from XRP derivatives markets?
A: Over $220 million in open futures positions have been liquidated in the past ten days, according to CryptoQuant data—reflecting reduced trader confidence.

Q: What are the key support and resistance levels for XRP?
A: Immediate resistance sits at $2.41 (50-day SMA), with $2.51 (100-day SMA) above it. On the downside, $2.20 is critical support; failure to hold could lead to a test of $2.00 or lower.

Q: Is this sell-off temporary or part of a larger downtrend?
A: With declining volume and falling open interest, the market structure favors continued bearish pressure unless there’s a catalyst—such as ETF news or regulatory clarity—that reignites buying interest.

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Final Thoughts: Navigating Uncertainty in 2025

XRP stands at a pivotal juncture. While Ripple’s legal victory provided temporary relief, the path forward hinges on macro-regulatory developments beyond technical indicators alone.

Investors must weigh several variables:

In such environments, risk management becomes essential. Traders should monitor open interest trends, volume spikes, and regulatory updates closely—especially as U.S. election dynamics continue shaping financial policy.

For long-term holders, volatility may present opportunities. But for now, caution prevails.

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