XRP has been experiencing dramatic price swings, briefly dropping below $2 before recovering. This recent decline followed a sharp rally to $3 earlier this month, fueled by speculation surrounding potential regulatory shifts in the crypto market. Now, traders are debating whether XRP has the momentum to climb to $5 or if another correction is imminent.

Despite recent setbacks, some analysts believe XRP still holds strong potential, particularly as institutional adoption increases and regulatory uncertainty begins to clear up. Could these factors help propel the token toward a new high?

Why Did XRP Drop Below $2?

XRP’s volatility has been on full display in recent weeks. Earlier this month, the token surged to $3 after former U.S. President Donald Trump posted on Truth Social, hinting that altcoins like XRP could be included in a future crypto reserve. This news triggered a wave of buying pressure, sending XRP’s price soaring. However, the excitement was short-lived.

Since March 3, XRP has fallen over 35%, wiping out a significant portion of its gains. The sharp decline took the token below $2 before a swift recovery. Despite this, some traders see the recent pullback as a potential buying opportunity rather than a sign of weakness.

Could XRP Rally to $5?

While XRP remains under pressure, several key factors could fuel a price recovery and push it toward the $5 mark.

• Institutional Interest Is Growing – XRP continues to be widely used in financial applications, particularly through Ripple’s On-Demand Liquidity (ODL) platform. Major institutions such as Tranglo and Travelex Bank have adopted the technology to streamline cross-border payments. As more financial players integrate XRP into their systems, demand could rise, supporting higher prices.

• Regulatory Clarity Could Be on the Horizon – The SEC has recently dismissed cases against major crypto exchanges, including Coinbase and Uniswap, leading to speculation that it may also drop its ongoing case against Ripple. A favorable outcome could provide much-needed legal clarity for XRP, allowing it to gain further legitimacy in the market.

• Potential for New Investment Products – If XRP receives regulatory approval, firms could seek to Discoverd investment products like spot exchange-traded funds (ETFs), similar to those recently approved for Bitcoin. This could attract a fresh wave of institutional and retail investors, driving demand for the token.

From a technical perspective, XRP must hold above the $2 level to maintain bullish momentum. If buyers regain control, the next key resistance point lies at $3.40. A breakout above this level could trigger a rally toward $5.

What’s Next for XRP?

XRP’s recent price swings highlight the unpredictable nature of the crypto market. While some investors remain cautious about further declines, others see strong potential for a rebound.

A combination of institutional adoption, improving regulatory clarity, and technical indicators could set the stage for a significant recovery. However, XRP will need to sustain key support levels and attract renewed buying interest to reach $5.

For now, traders will be watching XRP closely to see whether it can maintain its current momentum or if another pullback is on the horizon. The coming weeks will be crucial in determining the token’s next major move.