XRP Drops Below $3 as $539 Million Market Sell-Off Hits, What's Next?

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The cryptocurrency market faced a sharp correction over the weekend, with XRP dropping below the critical $3 threshold** amid a broader sell-off that triggered over **$539 million in liquidations across digital assets. At the time of writing, XRP was trading at $2.77, down 7.82% in the past 24 hours and 12% on a weekly basis, marking its third consecutive day of losses.

This sudden downturn has placed pressure on one of the top digital assets by market capitalization, reigniting debate about its short-term trajectory and recovery potential.

Market-Wide Volatility Triggers Risk-Off Sentiment

Bitcoin (BTC), often seen as a market leader, traded below $100,000 for three straight days, sending risk-off signals across both crypto and traditional financial markets. As BTC weakened, the rest of the crypto ecosystem followed, with altcoins experiencing amplified losses due to increased leverage and speculative positioning.

According to CoinGlass, the past 24 hours saw a staggering $539 million in total liquidations, reflecting widespread margin calls and forced exits from long positions. This level of volatility is typically associated with market inflection points—where sentiment shifts rapidly from bullish optimism to defensive caution.

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XRP Breaks Below $3: Psychological Support Now Under Threat

For weeks, the $3 price level served as a strong psychological and technical support zone for XRP. Since mid-January, buyers consistently stepped in whenever the price dipped near or slightly below this mark, reinforcing confidence in sustained upward momentum.

However, on January 31, the consolidation phase ended abruptly as selling pressure intensified. XRP broke below $3 and plunged to a low of **$2.75** during Sunday’s trading session—its weakest point in recent weeks.

While temporary breaches of key levels are common, a sustained close below $3 could signal weakening bullish control and potentially open the door to further downside.

Key Technical Levels to Watch

If sellers maintain dominance and push XRP toward the $2.61 SMA, the reaction at that level will be crucial. A strong bounce could reignite bullish momentum. Conversely, a break below may trigger additional stop-loss orders and extend the correction.

Can XRP Recover and Target $4?

Despite the current dip, the broader outlook for XRP remains cautiously optimistic among analysts. Should market conditions stabilize and Bitcoin regain strength above $100,000, XRP could see a swift recovery.

Here’s what needs to happen for XRP to resume its upward trajectory:

  1. **Regain $3**: A daily close above $3 is essential to restore trader confidence.
  2. Break Above $3.20: This would confirm that short-term bearish momentum has been neutralized.
  3. Volume Surge: Increased trading volume on up days will validate any breakout attempt.

If these conditions align, targets of $4** and eventually **$4.84 become realistic—especially if macroeconomic factors such as interest rate expectations or regulatory clarity improve.

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FAQ: Understanding XRP’s Current Market Move

Why did XRP drop below $3?

XRP fell below $3 due to a combination of broad market selling pressure, Bitcoin weakening below $100,000, and over half a billion dollars in leveraged positions being liquidated. These factors created a risk-averse environment where investors moved away from altcoins like XRP.

Is XRP still a good investment after this drop?

Many analysts view pullbacks like this as healthy corrections within an ongoing bull trend. With strong fundamentals—including active development on the Ripple network and growing adoption in cross-border payments—XRP remains attractive for long-term investors who buy during dips.

What happens if XRP breaks below $2.61?

A sustained break below the 50-day SMA at $2.61 could lead to further downside toward $2.50 or even $2.40. However, such levels have historically attracted strong buying interest, making them potential reversal zones rather than free-fall triggers.

Could XRP reach $4 in 2025?

Reaching $4 is possible if overall market sentiment improves, Bitcoin stabilizes above $100,000, and XRP successfully reclaims key resistance levels. Momentum would need to build through increased adoption news or favorable regulatory developments.

How do liquidations affect XRP’s price?

Large-scale liquidations amplify price swings because automated margin calls force rapid selling (or buying) of assets. The $539 million in recent liquidations accelerated downward pressure on XRP by triggering cascading sell-offs in leveraged positions.

What should I watch next for XRP?

Monitor whether XRP can reclaim $3 and hold above it. Also watch Bitcoin’s performance, overall market sentiment, and trading volume on major exchanges. Any positive news from Ripple or institutional interest could act as catalysts.

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Final Outlook: Correction or Trend Reversal?

While the drop below $3 has raised concerns, it’s important to distinguish between a temporary correction and a full trend reversal. The fact that the **$2.61 SMA continues to hold** suggests underlying demand remains intact.

Market cycles often include periods of consolidation and shakeouts—designed to flush out weak hands before the next leg up. For informed investors, this moment may present a strategic entry point rather than a reason to exit.

Ultimately, XRP’s path forward will depend on three key factors:

As volatility subsides and clarity returns, XRP stands ready to respond—either with a rebound toward $4 or a deeper test of support levels.

Core Keywords:

With proper risk management and awareness of key levels, traders and investors can navigate this volatile phase with confidence—and potentially position themselves ahead of the next major move.