XRP dropped 19% from its recent high, with over $113 million in long positions liquidated.
Analysts are seeing the correction as healthy, with XRP still targeting $10–$15 in the short term.
Technical indicators show the asset is no longer overbought, and there might be room for growth.
XRP, one of the largest altcoins in the market, recently fell 19% from its eight-year high of $3.66. The cryptocurrency crashed to an intraday low of $2.95, standing as a 12.5% decline within just 24 hours.
While this decline has rattled some investors, analysts generally agree that the pullback is healthy and could actually lay the foundation for XRP’s next leg up.
The general market experienced nearly $1 billion in liquidations across the board while this happened. Ethereum led the pack with $195 million in forced closures, most of which came from long trades and XRP wasn’t far behind.
While this liquidation spree was devastating for many investors, analysts agree that liquidations like these often point towards a bottoming phase.
Pseudonymous analyst CryptoData noted, “Although we didn’t reach the $1B mark that often signals a local bottom, the volatility may compensate for that.”
Before the crash, XRP’s price action showed signs of being overheated. The RSI in particular, climbed as high as 88 on the daily chart, which is well above the overbought threshold of 70.
As of now, the RSI has cooled and now sits at around 56 on the daily chart. The same is true for the weekly chart, where readings have dropped from 71 to 61. These figures indicate that the asset is no longer in overbought territory and it may be gearing up for more sustainable growth.
The performance of XRP on the 4-hour chart | TradingView
At the moment, the $3 level, which aligns with the 100-period SMA, is acting as support.
In essence, if this level fails to hold, XRP may drop further to the 200-period SMA at $2.60.
Despite the recent turbulence, multiple analysts are maintaining bullish targets. Analysts like Egrag Crypto pointed out how aggressive buyers stepped in after the sell-off. He advised traders not to give in to fear and to “stay strong and hold your position.”
XRPunkie, another well-followed analyst, described the pullback as a “healthy correction” and predicted that the rebound could still take XRP to between $10 and $15.
Similarly, crypto analyst Dom projected a long-term top between $7 and $10, depending on XRP’s dominance and overall market performance.
The $3 support level is now very important for XRP’s price. If bulls can hold this level and trigger a rebound, XRP could make another push toward its $3.66 multi-year high.
A decisive close above this level would open the door for targets at $4 and even $4.86.
However, if XRP fails to stay above the 20-day EMA which currently sits around $2.99, it could point towards more downside. A break below this price level might invalidate the recent rally, indicating that the $3.40 breakout was a bull trap.
In the shorter time frame, XRP has already broken below $3.34, which indicates that bears are regaining control.
If buyers step in near $3 or $2.80 and the price rebounds above the moving averages, this could mark the end of the correction. On the flip side, failure to bounce would put the next support at $2.60 in focus.