Typically, a country loses its reserve currency status when there is an already established loss of economic and political primacy to a rising rival, which creates a vulnerability (e.g., the Netherlands falling behind the UK, or the UK falling behind the US), and there are large and growing debts monetized by the central bank printing money and buying government debt. This leads to a weakening of the currency in a self-reinforcing run that can’t be stopped because the fiscal and balance of payments deficits are too great for any cutbacks to close.
