In recent trading, XRP dropped below the $3 threshold, hitting a low of $2.88 during heavy selling. The fall occurred following the dumping of more than 470 million XRP tokens by institutional investors within ten days. Analysts observed that these transfers created fast selling pressure which further boosted the correction.
Highly leveraged positions in the derivatives market accompanied the movement of whales. After key support levels were breached there were long position liquidations, which further boosted the depreciating trend. On-chain statistics supported the increased whale activity, as large holders reduced their balances and smaller ones increased them.
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This was the first time since mid-August that the asset breached its $3 support. Analysts pointed to $2.90 as a near-term critical level to hold. A further drop would cause the price to fall below this threshold to $2.78.
The technical charts indicate recurrent failures at the resistance range of $3.15-$3.20. The decline across the 50-day simple moving average added bearish conviction. Momentum indicators like the Relative Strength Index (RSI) suggested that selling pressure was growing and the Stochastic Oscillator had reached overbought conditions.
The decline of XRP reflected losses in the crypto landscape. ADA, the Cardano token, declined almost 10 percent over 24 hours and has fallen by 15 percent since mid-August. Ethereum also fell but briefly dropped to $4,080 before settling into some recouped ground.
Macroeconomic uncertainty and weak liquidity intensified the volatility. The delay in approving exchange-traded fund applications by the US Securities and Exchange Commission (SEC) increased investor unease. Traders cited this regulatory uncertainty as a reason to taint confidence in the various major cryptocurrencies.
Investors are closely observing XRP's position at about $2.90. A move past the $2.92 level could enable the token to break once more into the $3 zone but it would necessitate more prominent flows and less liquidation hazard. Analysts stress that the newest dive is the result of structural pressures and not market manipulation.
As of mid-July, over 93% of the XRP supply in circulation is still profitable to hold, a situation that leaves the market at the risk of even more profit-taking moves in case macroeconomic conditions deteriorate. A speech by the Federal Reserve Chairman, Jerome Powell, at Jackson Hole would likely dominate short-term sentiment.