Key Takeaways:
- XRP dropped 19% on Thursday, reaching an intra-day low of $2.95 from its eight-year high near $3.66.
- XRP’s price experienced a 12.5% correction during the last trading session.
- $113.62 million in XRP liquidation losses occurred over the past 24-hours.
- Analysts are describing the pullback as a “healthy correction,” with a $10-$15 price target still being considered.
XRP Price Dips Amid Broader Crypto Market Correction
XRP (XRP) price saw an 19% drop on Thursday, pricing the digital asset as low as $2.95 according to Cointelegraph Markets Pro and TradingView data, down significantly from its eight-year high of approximately $3.66.
The wider cryptocurrency market also experienced choppy trading, slipping 3% in the preceding 24 hours to a crypto market capitalization of $3.79 trillion.
Massive XRP Liquidations Signal Overbought Conditions
Cascading liquidations played a key role in XRP’s steep decline as the session progressed. This was triggered by thin market liquidity and forced position closures among over-leveraged traders.
According to CoinGlass data, the overall crypto market recorded $968 million in total liquidations last 24 hours. Ethereum led with $195 million in liquidations ($168 million of which were leveraged longs). For XRP specifically, $113.62 million in liquidations were recorded, with $106.8 million accounting for long liquidation losses.
Crypto liquidations represent automatic forced sales triggered when leveraged positions fail to meet maintenance margin requirements during sharp price moves, often exacerbating declines.
Technical Indicators Point to Ongoing Weakness
Technical analysis suggests the sell-off was partially linked to significant overbought conditions.
According to indicators, XRP’s momentum cooled substantially after its recent surge. On the weekly chart, the Relative Strength Index (RSI) fell from an extremely elevated level around 71 (not published value) to 61. On the daily chart, the RSI dropped from 88 towards more neutral territory, currently hovering around 56 from recent levels, indicating waning bullish pressure.
Market participants are keeping a close eye on the support level at $3.00, which coincides with the 100-day simple moving average. A failure to maintain this could see XRP test the weaker 200-day moving average support zone at $2.60.
Analysts Weigh in on Health of Correction
Despite the sharp price pullback, many analysts characterize the move as a “healthy correction” necessary for the market to recalibrate.
Name withheld analyst CryptoData commented: “At a macro level, despite not quite reaching the typically robust liquidation bottom signal (exceeding $1 billion), the underlying volatility appears capable of consolidating this complex into a sustainable structure.”
Analyst Egrag Crypto described it as a pause for reflection, advising:
“Don’t let fear take over now! Stay strong and hold your position.”
Analyst Simplicity underscored the presence of buying interest at lower levels, stating: “But buyers stepped in aggressively, suggesting foundational support.” Furthermore, XRPunkie echoed the view of a healthy correction before renewed upside: “Let it bottom out, and we should be on our way to much higher prices… $10-$15 still very much in play.”
Crypto perspectives include potential top targets between $7-$10 and expectations for the asset to regroup and eventually surpass its 2018 all-time high, driven by enduring liquidity.
Note: The crypto market is highly volatile, and this information is not investment advice.
