Ripple’s XRP has experienced a sharp decline, falling over 13% in the past day and trading near $2.15. This drop brings it close to the critical $2.00 support level, a point that could determine its short-term direction. While some traders anticipated a rise above $3.40, recent market-wide liquidations and negative technical patterns have intensified selling pressure. Still, certain analysts believe a strong recovery is possible if key support holds.
Market Liquidation and Sentiment Shift
XRP’s market capitalization has decreased to approximately $120 billion, while trading volume surged by 184%, reaching over $10 billion. This spike in activity is largely driven by panic selling. In the derivatives market, long positions worth nearly $58 million were liquidated in the past 24 hours, with the vast majority being bullish bets. Such large-scale liquidations often force additional selling, creating a negative feedback loop.
The funding rate for XRP futures—indicating the cost of holding long positions—has also dropped significantly, from 0.25% to just 0.04% per week. This suggests that traders are becoming more cautious and less willing to bet on价格上涨. The broader cryptocurrency market decline, including Bitcoin and Ethereum, has added to the negative sentiment, making it difficult for XRP to attract new buyers.
Technical Indicators and Price Patterns
Despite the downward trend, some technical analysts observe a hidden bullish divergence on XRP’s daily chart. This occurs when the price forms higher lows while the Relative Strength Index (RSI) shows lower lows, indicating that selling pressure may be weakening. If XRP can maintain support at $2.00, this pattern could signal a potential rebound toward $3.80 or higher.
However, if the price falls below $2.00, the next major support lies near $1.79, which aligns with the 61.8% Fibonacci retracement level. A break below this could lead to further declines toward $1.61, invalidating the short-term bullish outlook.
Regulatory Impact and Institutional Adoption
Ripple’s ongoing legal proceedings with the SEC continue to influence XRP’s price movements. Although a court ruling in mid-2024 declared that XRP is not a security, the case remains unresolved. This regulatory uncertainty has made some institutional investors hesitant, limiting upward momentum.
On a positive note, the SEC has received several applications for XRP-themed exchange-traded funds (ETFs). Approval of a spot XRP ETF could attract significant institutional capital and support higher price levels. Market predictors currently assign a high likelihood of approval under certain administrative changes, but investors remain cautious until clearer guidelines emerge.
Ripple’s real-world utility through its On-Demand Liquidity solution for cross-border payments continues to grow. However, wider adoption must translate into sustained demand for the token to positively impact its value.
Key Resistance and Support Levels
From a technical perspective, the $2.00 level is crucial for XRP. If buyers defend this support, a recovery toward the 50-day simple moving average near $2.73 could occur. Breaking above $2.60 might open the path toward $3.40.
Conversely, if selling pressure continues, XRP might form a head and shoulders pattern—a bearish signal—which could lead to a decline toward $1.79 or lower. Traders should monitor volume and key levels for confirmation of the next trend.
Long-Term Outlook: $5 and Beyond
Many investors wonder if XRP can reach $5 in the next bull market. Achieving this would require improved regulatory clarity, increased institutional adoption, and a favorable broader crypto market cycle. XRP has historically performed well during altcoin rallies, and a sustained break above $3.40 could indicate renewed bullish momentum.
However, the token must first stabilize above key support levels and regain market confidence. Until then, higher price targets remain speculative.
Frequently Asked Questions
What is causing XRP’s price to decline?
XRP is facing selling pressure due to market-wide liquidations, bearish technical patterns, and ongoing regulatory uncertainty. Large-scale futures liquidations have exacerbated the drop.
Can XRP recover above $3?
Yes, if it holds the $2.00 support and bullish divergence patterns confirm a reversal, XRP could aim for $2.60 and eventually $3.40. Institutional developments such as ETF approvals could also help.
What are the major support levels for XRP?
The immediate support is at $2.00. If broken, the next key level is $1.79, followed by $1.61. These are based on technical retracement and historical price action.
How does regulation affect XRP’s price?
Positive regulatory clarity can boost investor confidence and adoption, while uncertainty or negative rulings can lead to selling pressure. The outcome of Ripple’s case with the SEC remains pivotal.
Is now a good time to buy XRP?
It depends on risk tolerance and market outlook. Some traders see value near support levels, but others prefer waiting for stronger bullish confirmation or regulatory news.
What is the long-term potential for XRP?
Long-term growth depends on adoption in cross-border payments, regulatory resolution, and overall crypto market trends. Utility and institutional use cases could support higher valuations over time.
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