Key Insights:
- XRP dropped 19% from recent highs and triggered $113 million in long liquidations.
- Analysts are describing the drop as a healthy correction after a period of overbought conditions.
- $3 is now an important support level, and holding it could trigger a bullish reversal.
XRP recently experienced a strong rally that took it to a multi-year high of $3.66.
Soon after this, however, the cryptocurrency suffered a harsh correction and dropped by nearly 19% to $2.95. Despite the plunge, market analysts are still calm and optimistic.
Many are calling it a healthy reset in an overheated market, and while XRP appears to be eyeing the $3 price level, a recovery could be closer than most think.
XRP Price Falls from Eight-Year Highs
XRP’s price had been on a tear lately, after climbing to a multi-year high of $3.66. That bullish strength soon came to a halt on Thursday as the token dropped 12.5% in a single day. This also stands at as much as a 19% drop from its recent peak.
This sudden move wiped out $113 million in leveraged XRP positions, with $106 million being long trades. In total, the general crypto market saw $968 million in liquidations over 24 hours, with Ether (ETH) leading the pack.
While the headlines were focused on the drop, seasoned traders saw this move as part of a normal cycle.
According to analyst CryptoData, even though the market didn’t quite hit the $1 billion mark, the high volatility was enough to indicate the worst might be over.
At least for now.
Today we saw a massive flush across the board with most leverage longs/OI getting wiped. Although we didn’t reach the $1B of liquidations that historically marks a local bottom within 1-3 days, but the volatility over the last few days may make up for that.
Liquidation Heatmap… pic.twitter.com/ugR3wfsjXB
— CryptoData (@TheCryptoData) July 24, 2025
A Technical Reset After an Overheated Run
The technical indicators support the idea that XRP’s fall was overdue. The RSI surged to 88 last week, which put XRP deep into overbought territory, which means that the pullback was inevitable.
As of Thursday, the RSI has cooled significantly, dropping to 61 on the weekly chart and to 56 on the daily.
While these levels are still bullish, they indicate the asset has room to move in either direction, without being considered overbought or oversold.
Through it all, the support level at $3, which aligns with the 100-period simple moving average (SMA), has become the most important level to watch. If this support breaks, XRP may revisit the 200-period SMA around $2.60.
Analysts are watching this area closely for signs of a bounce or further breakdown.
XRP Market Sentiment Remains Bullish Despite Pullback
Despite the volatility, many analysts are optimistic. Egrag Crypto, for example, described the correction as an emotional shakeout. The analyst emphasized that long-term holders should not panic.
#XRP – Volume Analysis:
The recent formation broke with significant selling volume, but buyers quickly stepped in with aggressive purchases. However, sellers came back for another round of selling.
I truly believe this dip might scare many newcomers, leading them to sell… pic.twitter.com/MPm9xKrsP6
— EGRAG CRYPTO (@egragcrypto) July 24, 2025
Others, like Dom, offered a more moderate target range of $7–$10, depending on market dominance and macro trends. Even conservative projections show strong upside from current levels.
There are now two main zones that will determine XRP’s short-term direction. The first is the aforementioned $3.00 support.
If bulls defend this level and buying volume returns, a bounce back to $3.66 could be in play. On the other hand, the $2.60 support could offer some leverage if $3 fails.
A drop here might delay the uptrend, but could also present a strong buying opportunity.
Overall, resistance remains at $3.40 and $3.66, and a break above $3.66 could open the door to $4 or possibly $4.86 in the next major leg up.
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