**Category:** Markets
**Category ID:** 57
**Slug:** xrp-critical-support-xrpl-defi-upgrade-liquidity
**Focus Keyword:** XRP DeFi upgrade
**Meta Description:** XRP hovers near $1.29 support as the XRP Ledger community proposes major DeFi upgrades including new liquidity models and automated market maker enhancements.
XRP is testing a critical support zone near $1.29 as bearish pressure builds across the broader cryptocurrency market, but a proposed DeFi upgrade on the XRP Ledger could provide the fundamental catalyst that bulls have been waiting for.
The token has dropped 4% below the $1.35 level in the last 24 hours, following a broader market sell-off triggered by escalating US-Iran tensions and a ninth consecutive day of Bitcoin ETF outflows. XRP’s 50-day moving average sits at $1.38, while the 200-day moving average is at $1.52 — both acting as overhead resistance that the token has been unable to reclaim since mid-May.
XRPL DeFi Upgrade Proposal
On May 29, the XRP Ledger developer community circulated a draft plan for a comprehensive DeFi upgrade that would introduce new liquidity models to the network. According to documentation shared on the XRPL开发者 forum, the proposal aims to address one of the XRP Ledger’s longest-standing limitations: its inability to support automated market makers and concentrated liquidity models comparable to Ethereum’s Uniswap v3 or Solana’s Orca.
The upgrade would introduce:
If implemented, the upgrade would transform XRPL from a payments-focused blockchain into a full-featured DeFi ecosystem. Ripple’s CTO David Schwartz has publicly supported the direction, noting that the proposal is consistent with the network’s long-term vision of becoming a settlement layer for institutional finance.
XRP Market Structure Wobbles
The technical picture for XRP is fragile. The token broke below the $1.30 support level on Thursday, breaching a level that had held since early April. Coinbase data shows that XRP has lost 17% of its value over the past 30 days, underperforming both Bitcoin (down 9%) and Ethereum (down 11%).
Open interest in XRP futures has declined 12% this week, signaling that leveraged traders are reducing exposure amid the market uncertainty. However, funding rates on major exchanges have turned slightly negative, which historically has preceded short squeezes when the broader market stabilizes.
Deribit options data shows that the $1.50 call strike has the highest open interest among all XRP options expiring in June — a sign that some traders are positioning for a recovery. But the put/call ratio has climbed to 1.35, indicating that hedges are dominating speculative bets.
XRP ETF Flows Remain Positive
Despite the price weakness, XRP ETFs recorded their best month of 2026 in April with $118 million in net inflows, according to Bloomberg Intelligence data. May flows appear to be moderating, but the product class has remained net positive even as Bitcoin and Ethereum ETFs have seen persistent outflows.
The divergence suggests that institutional investors may view XRP as a relative value play in a market where Bitcoin has become expensive relative to network activity. XRP’s price-to-network-ratio — comparing market cap to on-chain transaction volume — is near its lowest level since January, implying that the token may be undervalued relative to its usage.
What’s Next
The XRPL upgrade proposal enters a 30-day community review period. If it reaches consensus, a validator vote would determine implementation. Given that Ripple-affiliated validators control a significant portion of the Unique Node List, the upgrade is likely to pass — but the timeline for deployment remains uncertain.
For XRP’s price, the near-term direction depends more on macro factors than protocol upgrades. A de-escalation in US-Iran tensions or stabilization in Bitcoin ETF flows could trigger a relief rally back toward $1.45. Conversely, a break below $1.25 would open the door to a retest of the $1.12 level, last seen in March.
FAQ
What is the XRPL DeFi upgrade proposal?
A proposal to add concentrated liquidity pools, dynamic fees, native lending markets, and cross-chain bridges to the XRP Ledger, transforming it into a full DeFi ecosystem.
Why is XRP’s price falling?
XRP has been dragged down by broader market weakness linked to US-Iran tensions, record Bitcoin ETF outflows, and general risk-off sentiment across crypto markets.
Will the XRPL upgrade boost XRP price?
Long-term, yes — DeFi functionality would increase network utility and token demand. Short-term, macro factors and broader market sentiment are the dominant price drivers.
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