XRP retreated below the $1.50 mark on Wednesday, as a rapid rally that saw the token climb roughly 70% in under a week prompted traders to lock in gains. The digital asset, which had surged from around $1 to a peak of $1.70, traded in the $1.44-$1.48 range during the session, raising questions about whether the move had outpaced underlying spot demand.
Resistance zone triggers profit-taking
The rally carried XRP into the $1.50-$1.70 area, a region identified by TradingKey as a zone of prior peaks and heavy trading volume. This level gave investors who had been trapped during earlier rallies a chance to exit, while short-term traders with substantial unrealized profits also took the opportunity to cash out.
Bitcoin's pullback after briefly moving above $80,000, coupled with elevated Bitcoin dominance, further drained liquidity from altcoins, adding to the selling pressure on XRP.
FX Leaders analyst Arslan Ali Butt described the consolidation as a normal response to a 72% advance. He highlighted $1.4287 as immediate support, with $1.5328 as the level XRP needs to reclaim to build momentum toward another test of $1.70.
Leverage amplifies the reversal
The bigger concern for bulls is the extent to which the rally was fueled by derivatives. CryptoQuant data cited by CCN showed Binance's estimated XRP leverage ratio at its highest level in over seven months. CryptoQuant contributor Arab Chain noted that rising leverage alongside higher prices and open interest could reflect increased confidence, potentially supporting further gains.
That dynamic worked in XRP's favor while prices were climbing. Once the token stalled, the same leverage magnified downside pressure. CCN reported XRP futures open interest near $3.45 billion, with roughly two long positions for every short on Binance, and a three-to-one imbalance among top traders.
About $18.9 million of XRP positions were liquidated over 24 hours, including approximately $15 million in longs. Futures trading volume reached about $6.4 billion, compared with roughly $1.2 billion in spot volume—an imbalance that helps explain the sharp reversal.
ETF inflows remain supportive
Despite the correction, regulated demand for XRP continues to look constructive. FX Leaders reported that US-listed XRP products have recorded positive inflows for six consecutive weeks, including about $40 million in the latest week.
Spot-based investment demand is generally more durable than leveraged futures positioning, which can be sensitive to short-term sentiment shifts. Sustained ETF inflows could help absorb some of the profit-taking pressure, though bulls still need to defend key technical levels.
Butt sees $1.4287 as the immediate support to hold. A successful defense keeps the short-term structure constructive, while a move above $1.5328 could reopen the path toward $1.70. A break below support could expose the $1.34-$1.35 region.
For broader context, bitcoin's resilience above $78K and ongoing ETF inflows have supported the crypto market, even as altcoins like XRP face profit-taking. Similarly, Cardano has seen whales offload holdings, reflecting a broader trend of investors taking gains after recent rallies.
This article is for informational purposes only and does not constitute financial advice.
