
XRP Price Drops 19% as Analysts Call It Healthy Correction
XRP Price Drops 19% as Analysts Call It Healthy Correction
XRP Experiences Sharp Decline Amid Broader Market Weakness
XRP price has dropped significantly, falling 19% from its recent eight-year highs and declining 12.5% in the past 24 hours. The cryptocurrency reached an intraday low of $2.95 on Thursday after touching a multiyear high of $3.66. This decline occurred alongside broader cryptocurrency market weakness, with the total market capitalization slipping 3% to $3.79 trillion in the last 24 hours.
Despite the substantial price correction, market analysts are characterizing this pullback as a healthy market movement rather than a bearish reversal. Many experts maintain that double-digit price targets for XRP remain achievable in the near term.
Massive Liquidations Hit Leveraged Positions
The XRP price decline triggered substantial liquidations across cryptocurrency exchanges. XRP leveraged positions saw $113.62 million liquidated, with long positions accounting for $106.8 million of these forced closures. The broader cryptocurrency market experienced nearly $1 billion in total liquidations over the 24-hour period.
Cascading liquidations and thinning liquidity contributed to XRP's sharp price movement as over-leveraged long positions were systematically closed. Ethereum led total liquidations at $195 million, including $168 million in long positions.
Cryptocurrency liquidations occur when leveraged trading positions are forcibly closed due to price volatility or insufficient margin requirements. These automatic sales often amplify market movements and create additional downward pressure on prices.
Technical Analysis Reveals Overbought Conditions
Technical indicators suggested XRP was significantly overbought across multiple timeframes following its recent rally. The relative strength index (RSI) had reached extremely elevated levels, with the daily chart hitting 88 on Friday before the correction began.
Currently, the RSI has moderated to 61 on the weekly chart, down from 71, while the daily RSI hovers around the neutral level of 56. The downward trajectory of these indicators suggests weakening bullish momentum in the short term.
The $3 level, which coincides with the 100-period simple moving average, now serves as critical support for XRP price. If bulls cannot successfully defend this level, the cryptocurrency could extend its decline to retest the 200-period simple moving average at $2.60.
Analysts Maintain Bullish Long-Term Outlook
Despite the recent price weakness, several prominent cryptocurrency analysts remain optimistic about XRP's long-term prospects. Market analyst Egrag Crypto noted that while the recent formation broke with significant selling volume, buyers quickly stepped in with aggressive purchases.
Fellow analyst XRPunkie described the ongoing pullback as a healthy correction and a normal component of cryptocurrency market cycles. He emphasized that this represents a short-term pause before prices resume their upward trajectory, maintaining that targets of $10 to $15 remain viable.
These analysts view the current price levels as providing opportunities for traders to accumulate positions at discounted prices before the uptrend resumes. The correction is seen as a necessary consolidation period following XRP's dramatic price appreciation.
Market Experts Set Higher Price Targets
Cryptocurrency analyst Dom recently suggested XRP may reach peak prices between $7 and $10, depending on its market dominance and broader market conditions. This assessment considers XRP's potential market share growth and overall cryptocurrency market expansion.
Bitpanda deputy CEO Lukas Enzersdorfer-Konrad believes XRP remains positioned to regroup and potentially surpass its 2018 all-time high. He cites strong liquidity conditions and growing confidence in alternative cryptocurrencies as supporting factors for this bullish outlook.
Historical Context Suggests Market Bottom Formation
The substantial liquidation volume across the cryptocurrency market may indicate the formation of a local price bottom. Historical data suggests that liquidation events approaching $1 billion often coincide with short-term market bottoms within one to three days.
Although the current liquidation volume fell slightly short of the $1 billion threshold that historically marks local bottoms, analysts suggest the recent volatility may compensate for this difference. The combination of oversold technical conditions and substantial position clearing could create favorable conditions for price recovery.
Risk Considerations for Investors
While analysts maintain optimistic price projections, cryptocurrency investments carry inherent risks. The recent 19% decline demonstrates the volatile nature of digital asset markets and the potential for rapid price movements in both directions.
Investors should consider their risk tolerance and conduct thorough research before making investment decisions. The cryptocurrency market's volatility can result in significant gains or losses over short time periods, requiring careful position sizing and risk management strategies.
The current market environment presents both opportunities and challenges for XRP investors, with technical indicators suggesting oversold conditions while fundamental analysis supports longer-term bullish scenarios.
For more Crypto, Web3, Blockchain & AI news visit : www.metamoonmedia.com