XRP is at a critical level in the market as traders prepare for possible volatility around the $3 mark. Analysts warn that large short-selling order groups above the current price could trigger a wave of liquidations if the token rises further, setting the stage for a strong bullish run due to selling pressure.
The token is currently trading at $2.86, down 1.53% from yesterday and nearly 8.91% over the past week. Resistance has formed between $2.90 and $2.95, creating a narrow range separating the market from the $3 level. Trading volume remains high at over $4.6 billion in 24 hours, making XRP one of the most liquid digital assets despite the recent price decline.
Institutional Flow And On-Chain Signals
On-chain metrics show that large investors are still actively participating in the market. Recent trading sessions have seen XRP's trading volume surge to 155 million tokens, much higher than the average of 63 million, indicating steady institutional participation even as prices slightly decline.
Data also shows that long-term XRP holders are taking profits during the correction. Realized profits have exceeded $2 billion since the latest downturn began, indicating that the distribution process is still ongoing. This follows a familiar pattern: at the end of July, XRP holders took profits of over $375 million in just one day when the price briefly hit $3.55, leading to the sharpest drop in months.
Whales, Liquidity And Short-Term Risks
The market heat map shows significant liquidity accumulating above the $3 level, a point that analysts believe could become a breakout point. If buying pressure pushes XRP past the resistance level, a series of forced short-sell orders could amplify momentum and push the price higher.
At the same time, the liquidity pool from $3 to $4.50, which emerged after the bullish surge in July, is now acting as an upper resistance zone that buyers must overcome.
According to on-chain data, over 94% of XRP holders are currently in profit, a figure often seen near cycle peaks. While this reflects strong investor confidence, it also increases the risk of selling pressure as traders take profits.
Analysts warn that this move places XRP in a zone some are calling "from belief to denial," where bullish sentiment can quickly turn into doubt if the upward momentum stalls.
Outlook
Currently, XRP's future depends on the $3 resistance level. A decisive breakout above this threshold could trigger a strong short-squeeze, but failing to reclaim this level could lead to a deeper pullback as profit-taking continues. With ample liquidity and whales still active, the next move could be quite powerful.
Traders are closely monitoring the $2.90–$3.00 range, as a clear breakout could favor the bulls, while another rejection could deepen the correction.
