Bulls are facing pressure with profit-taking, liquidation, and a lack of support below.
The drop of XRP below $3 came after a failed breakout attempt and severe selling pressure from both retail traders and large investors. On-chain data indicates that this move was driven by profit-taking and not panic. XRP may face further declines unless buying interest returns.
The price of Ripple [XRP] dropped below the $3 level after attempting to break a key resistance level. A sudden surge in selling has raised new concerns about its strength and the possibility of further losses in the future.
Selling the XRP cryptocurrency
Source: CoinMarketCap
Momentum is collapsing
Ripple's decline from its local peak of $3.15 marked a clear shift in momentum. The Relative Strength Index dropped to the oversold area at 29 at the time of publication, indicating strong downward pressure without significant improvement.
Meanwhile, the OBV indicator showed a sharp decline, a sign of aggressive selling and decreasing cumulative buying interest.
Selling the XRP cryptocurrency
Source: TradingView
All this shows a community where sellers dominate the market. Unless demand returns quickly, XRP faces the risk of further declines below $2.90, as short-term support appears increasingly fragile.
Heavy liquidation indicates a bull trap
The Binance heatmap showed intense activity above the $3.20 mark, where leverage built up before a sharp decline.
This consolidation suggests that many long positions may have been caught off guard and liquidated when the price reversed.
Selling the XRP cryptocurrency
Source: CoinGlass
The heavy liquidation area suggests that the $3.20 level acted as a bull trap, luring in leveraged traders before triggering a wave of forced selling.
With the price dropping below $3, the absence of large liquidation support areas indicates weak bullish defense.
Profit-taking and not panic
Selling the XRP cryptocurrency
Source: Cryptoquant
The recent spikes in XRP inflows to Binance, especially near local price peaks, indicate planned profit-taking rather than panic selling.
The recent spike in exchange deposits coincided with XRP rising above $3.40, indicating that whales and large holders were preparing to sell.
Although the volume of inflows is still below the massive spike we saw in May, which reached $660 million, the timing aligns with the recent shift in momentum. This supports the idea that the drop below $3 was a result of strategic selling.
If these inflows remain high, they may continue to pressure prices and limit any quick recovery.