XRP experienced a significant crash, falling below $3 for the first time since mid-January and reaching a low of $1.76 before bouncing back. The broader cryptocurrency market also suffered, with over $2.2 billion in liquidations, marking the worst sell-off since FTX’s collapse.
The crash was driven by growing concerns of a trade war following U.S. President Donald Trump’s announcement of high tariffs on Mexico, Canada, and China. However, analysts now believe that XRP’s decline may have set the stage for a strong recovery.
Prior to the crash, market analyst EGRAG had warned of a potential 40% drop, citing a bearish “shooting star” candlestick pattern on the monthly chart. His prediction came true, with XRP falling to $1.76 before rebounding.
EGRAG now believes that XRP could once again target $3. His analysis suggests that the altcoin found support at a key trendline, reinforcing the possibility of a bullish reversal. To sustain its recovery, XRP will need an increase in trading volume. EGRAG also noted that if the next candle closes below $1.83, there is still a risk of further downside.
Market analyst Dom attributed XRP’s sharp drop to low liquidity in the order book. Market makers withdrew bids, reducing buying pressure, while $300 million in sell orders flooded the market, overwhelming existing buyers. As a result, XRP plummeted until it reached areas with resting buy orders. Dom compared this event to the 2020 Bitcoin crash, where BitMEX halted trading to prevent further losses. In the case of XRP, once forced selling stopped, the price quickly rebounded by 29%, filling the order book.
Another analyst, Anbessa, believes that XRP is currently in consolidation mode. The mid-range support is holding, indicating potential stability. A break above $2.45 could trigger a bullish move towards $3. At the time of writing, XRP is trading at $2.34, with volatility decreasing. If buying activity returns and $2.45 is reclaimed, there is a chance for bulls to push towards $3.
Despite the significant drop, XRP is demonstrating resilience as it consolidates above $2.30. Analysts believe that if buying pressure returns, a move towards $3 is possible.
