XRP Price: Urgent Warning – Bulls Must Reclaim $3 to Avoid Deeper Correction

The cryptocurrency market often presents critical junctures for major assets. Currently, the XRP price faces an urgent challenge. Bulls must quickly reclaim the crucial $3 level to prevent a deeper decline. This comprehensive XRP analysis dives into the technical and on-chain indicators signaling potential trouble. Traders and investors closely monitor these signals, as failing to hold key support levels can trigger significant market movements. Understanding these dynamics is vital for navigating the volatile altcoin market.

XRP Price Action: A Critical Juncture

Recent trading activity has placed the XRP price under considerable pressure. On Monday, XRP experienced a notable 5% drop over 24 hours, trading at $2.97. This movement pushed it below the significant psychological $3 level. Historical data indicates that such a breach can precede substantial corrections. For instance, XRP previously closed below $3 in January, leading to a sharp 50% decline to $1.61 by April. This historical precedent underscores the importance of the current price action.

A daily close beneath $3 could trigger a similar downward trajectory. The immediate area of interest for potential support lies between the 50-day simple moving average (SMA) at $2.94 and the local low of $2.72, which was established on August 2. Should these levels fail to hold, the next significant zone for XRP support appears between the 100-day SMA at $2.60 and the 200-day SMA at $2.45. Losing this broader support range would likely bring $2.24 into focus, a level that marked the start of the July rally.

Technical Indicators Signal Weakness in XRP Analysis

Further technical analysis reinforces the bearish sentiment surrounding XRP. Data from Crypto News Insights Markets Pro and TradingView highlights a breakdown below a symmetrical triangle pattern on the daily chart. This breakdown occurred as XRP traded below the triangle’s support line at $3.00. A failure to reclaim this line puts the price at risk of falling further. Such a move could see XRP decline to as low as $2.25, representing a potential 25% drop from current levels. This specific pattern often indicates a continuation of the prior trend or a significant shift.

The Relative Strength Index (RSI) also provides crucial insights into market momentum. Over the last week, the RSI for XRP has notably declined, dropping from 61 to 45. This downward trend in the RSI suggests that the bulls have significantly lost their momentum. An RSI below 50 generally indicates that bearish pressure is increasing, and sellers are gaining control. This weakening momentum is a key factor contributing to the potential for a deeper XRP correction.

On-Chain Data: Spot Taker CVD and Profit-Taking

Beyond technical charts, on-chain indicators offer a deeper understanding of market dynamics. Analyzing the 90-day spot taker Cumulative Volume Delta (CVD) reveals a significant shift. Sell-orders, specifically taker sells, have become dominant once again. CVD measures the difference between buy and sell volume over a three-month period. Since July 28, sell-side pressure has dominated the order book. This occurred after the XRP/USD pair reached multi-year highs above $3.66 on July 18.

Negative CVD, often represented by red bars on the chart, indicates increasing profit-taking among traders. This signals waning demand as sellers take control of the market. If the CVD remains negative, it suggests that sellers are not backing down. This persistent selling pressure could easily set the stage for another leg down in price. Historical corrections often show similar patterns of sustained negative CVD preceding further declines. This reinforces the need for immediate XRP support at the $3 level.

Furthermore, as Crypto News Insights previously reported, approximately 94% of the XRP supply is currently in profit at existing prices. Historically, such high levels of supply in profit have often aligned with price tops. This situation creates a strong incentive for holders to take profits, increasing selling pressure. This confluence of technical breakdowns, weakening momentum, and on-chain profit-taking signals a challenging period for the altcoin market, with XRP at its forefront.

Navigating the Potential XRP Correction

The current confluence of technical and on-chain indicators paints a concerning picture for the XRP price. The breakdown below the $3 psychological level, coupled with declining RSI and negative spot taker CVD, suggests that bulls face an uphill battle. Reclaiming $3 quickly is paramount. Failure to do so could lead to a significant XRP correction, potentially targeting $2.24 or even lower levels seen earlier in the year.

Investors and traders should monitor these key levels closely:

• Immediate Resistance: $3.00 (reclaiming this is crucial)
• First Support Zone: $2.94 (50-day SMA) to $2.72 (local low)
• Second Support Zone: $2.60 (100-day SMA) to $2.45 (200-day SMA)
• Critical Lower Support: $2.24 (July rally starting point)

The overall sentiment in the altcoin market will also play a role. A broader market downturn could exacerbate XRP’s challenges. Conversely, a strong rebound across the crypto space might provide the necessary momentum for XRP bulls to regain control. This detailed XRP analysis provides a framework for understanding the current market dynamics, emphasizing the critical need for XRP to establish strong support above $3 to avert further declines.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.