XRP Price: Token Rebounds 18% After Dropping to $1.12 on Economic Data and AI Concerns

TLDR

• XRP fell to $1.12 on February 5, marking its lowest level since the October flash crash, but has since recovered to $1.32
• Weak US labor market data showed jobless claims rose to 231,000 while job openings dropped to 6.524 million in December
• Amazon’s announcement of $200 billion in AI spending for 2026 spooked investors and added to the crypto market sell-off
• Senate delayed the Market Structure Bill vote to spring 2026, dampening near-term sentiment despite long-term optimism
• XRP remains below its 50-day and 200-day moving averages, indicating continued bearish momentum in the short term

XRP experienced a sharp decline on February 5, dropping to $1.12 before recovering to current levels around $1.32. The token hit its lowest point since the October flash crash as multiple factors combined to trigger a broad market sell-off.

US labor market data released on February 5 showed concerning trends for the economy. Initial jobless claims jumped from 209,000 to 231,000 in the week ending January 31. JOLTS job openings data revealed an even more troubling picture, with openings falling from 6.928 million in November to 6.524 million in December.

The combination of rising unemployment claims and fewer available jobs raised concerns about economic weakness. Quit rates also increased to 3.204 million from 3.193 million, suggesting workers are losing confidence in the labor market.

These economic indicators typically signal reduced consumer spending ahead. Private consumption accounts for approximately 65% of US GDP, making labor market health critical to overall economic performance.

AI Spending Concerns

Amazon added to market anxiety by announcing plans to spend $200 billion on capital expenditures in 2026. The figure exceeded analyst expectations of $146 billion and focused heavily on AI infrastructure.

The announcement triggered questions about return on investment for AI spending across corporate America. Amazon’s stock dropped 11.2% in after-hours trading following the news, having already closed down 4.42% during regular trading hours.

XRP showed sensitivity to these AI-related headlines throughout the week. The broader crypto market fell 12.69% on February 5, while XRP declined 19.59% that day alone.

Legislative Delays

Senator Cynthia Lummis announced on February 5 that the Market Structure Bill vote would be pushed to spring 2026. The delay stemmed from ongoing disputes between traditional banks and the crypto industry over stablecoin yields.

Banks argue that higher stablecoin yields could pull deposits away from traditional financial institutions. The crypto community maintains that competitive yields are essential for the industry’s growth.

Coinbase withdrew its support for the Banking Committee’s draft text in January. CEO Brian Armstrong cited concerns that the proposed legislation would eliminate stablecoin rewards and allow banks to restrict competition.

Price Movement and Technical Levels

XRP traded at $1.36 before the labor market data release on February 5. The token then fell to $1.12 during the sell-off before stabilizing around current levels near $1.32.

The token now trades below both its 50-day moving average at $1.87 and its 200-day moving average at $2.21. This positioning indicates bearish momentum in the near term.

Key resistance levels sit at $1.50 and $2.00. Support levels are found at $1.20 and the psychological $1.00 mark. A break below $1.00 would bring the October flash crash low of $0.77 into focus.

ETF Demand and Future Outlook

Despite the price decline, XRP spot ETF demand has remained relatively stable. Analysts maintain medium-term price targets of $2.50 for 4-8 weeks out and $3.00 for 8-12 weeks.

The bullish medium-term outlook depends on several factors. These include progress on the Market Structure Bill, Federal Reserve rate cuts, and continued ETF inflows.

XRP must reclaim the $1.50 level to signal a potential trend reversal. A sustained move above this level would bring the 50-day moving average back into play.

The token currently faces resistance from a bearish trend line near $1.38 on hourly charts. Initial resistance also sits at $1.32, with major resistance at $1.40.

XRP is trading at $1.32 after recovering from the $1.12 low reached on February 5.

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