The cryptocurrency market witnessed a sharp downturn in XRP price recently, as the asset dropped to $2.11 following a decisive break below the $2.30 resistance level. This move triggered a wave of liquidations and sparked renewed debate over whether the current dip presents a strategic buying opportunity for investors.
While the selloff caught many traders off guard, technical analysis reveals key support levels holding firm—and conditions that may favor a short-term rebound.
Market Reaction and Liquidation Impact
XRP’s decline was accompanied by significant activity in the derivatives market. Over a 24-hour period, approximately $7.6 million worth of long positions were liquidated**, compared to just $312,760 in short liquidations. This created a staggering 182% imbalance** in favor of long liquidations, according to data from CoinGlass.
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Such an imbalance indicates that a large number of traders were heavily positioned for upward movement—making the breakdown even more painful. The resulting cascade of stop-loss triggers amplified downward momentum, pushing XRP down by 5.71% within hours.
Trading volume during this period declined slightly by 4.71% to $2.8 billion, suggesting that while selling pressure was intense, broader market participation did not spike—a sign that panic may be limited.
Prior to the drop, XRP had been consolidating between $2.30 and $2.32, a range many analysts viewed as a springboard for further gains toward $2.40 or even $2.50. Instead, price action broke below a rising trendline on the 4-hour chart, testing a critical demand zone between $2.06 and $2.10.
This zone is not arbitrary—it aligns with a long-term support trendline originating from April’s lows, which previously helped fuel XRP’s rally toward $2.50. Its continued relevance adds weight to its role as a potential floor for further declines.
Technical Indicators Signal Oversold Conditions
Despite the bearish momentum, technical indicators are beginning to flash early signs of exhaustion—a potential precursor to a relief rally.
On both the 30-minute and 4-hour charts, the Relative Strength Index (RSI) dipped below 30, entering oversold territory. The 4-hour RSI has since begun recovering, currently sitting at 29.41, suggesting downward pressure may be waning.
Similarly, the MACD histogram has flattened, with signal lines converging from deeply oversold levels. While the overall trend remains bearish, this convergence hints at slowing momentum and possible consolidation ahead.
The Stochastic RSI on the 4-hour timeframe is showing stronger bullish divergence. With readings now at 62.13 and 67.77, it suggests an imminent upward crossover could occur if buying interest returns.
However, not all indicators are optimistic. The Ichimoku Cloud on the 30-minute chart continues to reflect bearish dominance. Price is trading well below the cloud, while both the Tenkan-Sen and Kijun-Sen lines point downward. Additionally, the leading span of the cloud is widening to the downside—typically a sign of sustained bearish momentum.
Bollinger Bands on the 4-hour chart further emphasize volatility. Recent candles have extended beyond the lower band near $2.10, often seen as an overreaction zone that can precede reversals.
Key Support Levels Hold—For Now
One of the most encouraging signs for bulls is that XRP is holding above the weekly 0.382 Fibonacci retracement level at $2.11. This level is derived from the swing low in late 2024 to the peak reached in 2025, making it a significant reference point for long-term traders.
A weekly close above this Fibonacci level would keep the broader uptrend technically intact. The $2.08–$2.10 zone remains crucial—if it holds, a bounce toward $2.18 and $2.22 becomes increasingly likely.
Resistance lies at $2.26, which aligns with the midline of the previously broken Bollinger structure. On the daily chart, a descending trendline since May 21 continues to cap upside attempts, reinforcing bearish sentiment after multiple failed breakouts.
Should support at $2.08 fail, the next major psychological level comes into play: **$2.00. Beyond that, deeper support rests near $1.92, corresponding to the 0.618 Fibonacci retracement**—a historically resilient level in prior corrections.
For bullish momentum to resume, XRP must reclaim $2.22 decisively**, ideally with strong volume. Additional resistance awaits at the **20-day EMA ($2.23) and 50-day EMA ($2.24), both of which currently slope downward.
Fundamental Outlook Remains Positive
Despite short-term volatility, fundamental drivers continue to support XRP’s long-term value proposition.
Ongoing speculation about a potential SEC-approved XRP ETF has kept institutional interest alive. While no official filings have been confirmed yet, regulatory clarity from recent Ripple-related court developments has improved market sentiment.
Ripple’s expanding ecosystem—including strategic partnerships with financial institutions and blockchain initiatives—adds credibility to its use case beyond speculation.
One notable development is Ripple’s collaboration with Guggenheim, aimed at bringing institutional capital onto the XRP Ledger. Such alliances underscore growing confidence in XRP’s utility for cross-border payments and asset tokenization.
Some analysts project a short-term target of $3.20, citing strong underlying demand and limited supply dynamics during periods of market recovery.
Frequently Asked Questions (FAQ)
Is XRP a good buy at $2.11?
At $2.11, XRP sits near key technical support levels and shows oversold conditions across multiple indicators. For risk-tolerant investors with a medium-term horizon, this zone may present a strategic accumulation opportunity—especially if broader market sentiment stabilizes.
What happens if XRP breaks below $2.08?
A confirmed breakdown below $2.08 could trigger further selling, potentially testing $2.00 and eventually $1.92 (the 0.618 Fibonacci level). However, such a move would likely be met with strong buying interest given historical support and institutional involvement.
Can XRP recover to $2.50 in 2025?
Recovery to $2.50 is possible if XRP regains momentum above $2.30 and breaks through key EMAs with strong volume. Catalysts such as regulatory clarity or ETF speculation could accelerate this move.
Why were so many long positions liquidated?
Many traders expected a breakout above $2.30 and positioned accordingly with leveraged longs. When price reversed sharply instead, margin calls triggered automatic liquidations—amplifying the selloff.
What are the main resistance levels to watch?
Immediate resistance lies between $2.22 and $2.26. A sustained close above this range is needed to restore bullish momentum and challenge higher targets.
How does volume affect XRP’s price direction?
Declining volume during a selloff often signals lack of broad participation, which can limit downside depth. Conversely, rising volume on upswings confirms stronger conviction and increases likelihood of trend reversal.
Final Thoughts
The recent selloff in XRP has undoubtedly shaken short-term confidence, but it has also cleared overextended positions and reset technical conditions.
With key support holding and indicators pointing to oversold conditions, the market may be setting up for a corrective bounce—or even the start of a renewed uptrend if fundamentals align.
For traders and investors alike, monitoring price action around $2.08–$2.11 will be critical in determining the next major move.
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