XRP has recently been on a rollercoaster ride, experiencing one of its sharpest price drops of the year. The cryptocurrency plunged from $2.83 to a low of $1.77 in just a matter of hours. However, it managed to bounce back to around $2.44. Despite this rebound, XRP remains down approximately 14% over the past 24 hours and nearly 20% for the week. The intriguing part? Data indicates this wasn’t a typical sell-off but rather a panic-driven, derivatives-led flush—meaning it wasn’t driven by actual token selling. Furthermore, it seems a significant group of investors, often referred to as ‘whales,’ are increasing their XRP holdings despite market turbulence.
Panic-Led Derivatives Crash, Not Spot Selling
On-chain data reveals that this sudden drop in price wasn’t fueled by a wave of investors rushing to offload their tokens. Instead, the supply of XRP on exchanges has remained relatively stable over the past month—indicating that few tokens were sent to exchanges for liquidation even amidst this turbulent decline. This signals that the price drop likely originated from the derivatives market rather than spot selling.
As prices broke through key support levels, over-leveraged long positions were liquidated, triggering automatic closures of futures contracts by exchanges. This forced selling occurs without actual tokens transferring on-chain, clarifying that the panic was primarily a derivatives market event.
The Wyckoff Volume Spread Analysis (VSA) method further illustrates this off-chain frenzy: a massive red bar appeared at the height of the liquidation wave, transitioning to yellow bars as selling pressure reduced. This change from red (indicating strong selling control) to yellow (signaling a loss of that control) suggests that forced liquidations might be winding down.
VSA is a technique used to measure how price and volume interact, thereby providing insights into market control. Although it doesn’t differentiate between selling from spot markets and derivative-driven liquidations, it offers essential data for understanding the underlying forces at play.
Whales Accumulate as the Market Cools
Interestingly, while smaller traders faced significant pressure and were forced to sell, large holders known as ‘whales’ were seen quietly accumulating XRP during the downturn. Data from Santiment indicates that wallets holding over 1 billion XRP increased their total from 23.98 billion to 25.02 billion—a substantial addition of approximately 1.04 billion XRP, amounting to about $2.54 billion at current prices.
This accumulation pattern aligns with the on-chain data, which shows no notable spike in exchange balances. The increase in whale holdings, coupled with steady exchange supply, suggests this wasn’t a traditional sell-off driven by panic but rather a strategic move by large investors during a derivatives market shake-up.
Such accumulation often signals the bottom phase of a sentiment-driven decline, where the strong hands absorb the weak hands before a potential recovery begins.
XRP Price Eyes “This Rebound Target” as Recovery Builds
As of now, XRP trades at approximately $2.44. This price point coincides with the 0.5 Fibonacci retracement level drawn from the previous swing high down to the recent multi-week low of $1.70. For XRP to further solidify its recovery prospects, it needs to close above $2.43. Achieving this could pave the way for an advance toward $2.59, with a further target of $2.82 in sight—this aligns with the Wyckoff projection of over $2.74.
Conversely, should XRP fall below $2.28, it could weaken the bullish setup and introduce downside risks closer to the $2.05 mark. The data suggests that, with large whales accumulating, stable exchange supply, and the dilution of panic-driven sell-offs, the sentiment is shifting favorably. What unfolded was not genuine capitulation but rather a sentiment-fueled washout, potentially setting the stage for XRP’s next rebound.
