The decline in the price of XRP and its critical pullback in August 2026 is due to a combination of security issues, a slowdown in institutional momentum, and general market conditions.

1. On August 9, 2026, an attacker breached the Coreum bridge connected to the Ripple network. The attacker exploited a software vulnerability in the “re-layer” system of the Coreum bridge shared with the XRPL network. About 200,000 XRP coins were withdrawn in 94 consecutive batches and transferred to new wallets in order to launder them again. Although the issue was in the bridge code itself and the underlying Ripple network was not hacked, the incident raised investor concerns and led to an immediate drop in the price.

2. Sharp decline in ETF fund flows In 2026, there was a major slowdown in institutional momentum toward spot XRP funds in the United States compared with the end of 2025. Inflows fell steadily from $132 million in May to $59.46 million in June, then to $27.29 million in July. Since the beginning of this August, these inflows have dried up completely, recording only under $1 million, depriving the coin of liquidity that supports its rise.

3. Futures contract liquidation and the overall cautious market condition The market is exposed to widespread liquidations of long positions after the increase in open interest in XRP futures contracts to $2.73 billion. This liquidation coincided with a cautious, wait-and-see stance ahead of the release of U.S. Consumer Price Index (CPI) data, which influences decisions by the Federal Reserve and high-risk assets. The overall crypto market saw a broad sell-off wave in which the market value lost about $40 billion in a single day, and XRP was affected as it recorded its lowest levels in roughly 21 months.

4. Technically, the sell pressure is evident as a break below key support levels and trading below the Exponential Moving Average (EMA) lines for 50, 100, and 200 days. A decline in the Relative Strength Index (RSI) near oversold zones (around 35) reflects sellers’ control and the absence of strong buy demand from individual investors.