MarketsNewsPrice Analysis

XRP Falls 8% Below Key Level After Rally—Time to Sell?

  • XRP drops 8% after rally, slicing through the vital $2.95 support with strong bearish momentum.
  • On-chain Spot Taker CVD has flipped red, showing dominance of sellers since late July.
  • XRP dominance chart holds above 4.5%, keeping the bullish pennant formation technically valid.

XRP’s bullish momentum took a sharp hit over the past 24 hours, plunging 8% and slicing through the critical $2.95 support level. This zone, once the launchpad for a powerful rally that lifted the token to a peak of $3.33, now lies in the rearview mirror as sellers take control.

The decline carved out a well-known bearish formation on the charts—the “Three Black Crows,”—a pattern of three consecutive long-bodied red candles. This setup often signals a shift from bullish to bearish sentiment and reflects growing pressure from the sell side.

Adding weight to the move is a surge in trading volume, now up 23.66% to $7.95 billion. But instead of signaling buyer enthusiasm, this spike appears to reflect panic exits, hinting that some investors are locking in profits or cutting losses.

TradingView chart of XRP

Source: TradingView

The decisive close below $2.95 paints a cautious picture for the days ahead. If bearish momentum holds, XRP may continue drifting toward the next potential support area between $2.87 and $2.80, a zone that could offer temporary relief or become the next battleground.

Yet despite the pullback, XRP remains structurally strong on the monthly chart. The token is still up over 32.93% from its July open at around $2.22—a reminder that broader sentiment hasn’t entirely turned bearish.

Yet the core question looms large: Is this just a cooling-off phase or the start of a broader reversal? For traders, this may be a key inflection point. Short-term holders could view the breakdown as a warning to step aside, while longer-term investors may see it as a healthy retracement within a broader uptrend.

On-Chain Data Points to XRP Sentiment Reversal

On-chain signals echo XRP’s recent price retreat, painting a clear picture of shifting sentiment beneath the surface. The Spot Taker CVD (Cumulative Volume Delta)—a gauge of buy-versus-sell pressure—has turned distinctly red since July 28. After weeks of taker buy dominance that helped propel XRP toward its $3.33 peak, the tide has turned.

CryptoQuant chart of XRP

Source: CryptoQuant

Sellers have stepped in with force, replacing once-strong buying momentum with growing sell-side aggression. Adding to the shift, whale-to-exchange flows on Binance surged dramatically just before the drop. On July 30, more than 55,000 XRP was transferred to exchanges by large holders, a classic move that often signals planned exits or profit-taking.

This activity closely aligned with XRP’s failed attempt to hold above $3 and its eventual break below the $2.95 support. However, by August 1, whale deposits had sharply declined, returning to levels seen earlier in the month. This retreat suggests that the bulk of selling pressure from large holders may have already been absorbed, hinting at a strategic dump rather than a sustained exit.

CryptoQuant chart of XRP Ledger

Source: CryptoQuant

The temporary lull in whale activity offers a potential breather for the market—but caution still lingers. While price alone may suggest a minor correction, these coordinated on-chain movements reveal a market recalibrating. With taker sell pressure still dominant, the coming days will be crucial in determining whether bulls can regain control or if XRP drifts further into consolidation. For now, the charts say pullback. The chain says pause.

XRP Macro Outlook Holds Strong Despite Local Weakness

Despite the short-term bearish pressure reflected in spot markets and on-chain flows, XRP’s macro indicators continue to flash strength. According to a long-term chart from EGRAG CRYPTO, XRP dominance remains locked within a bullish pennant—one of the most reliable continuation patterns in technical analysis.

Egrag Crypto analysis chart

Source: X

With dominance currently holding above the key 4.5% threshold, this level serves as a crucial validation zone. A sustained hold here could fuel a breakout toward 11% or even 21–27% dominance in the coming cycles, signaling significant capital rotation into XRP relative to the broader crypto market.

The analyst emphasizes that the current move is unfolding on the monthly timeframe, filtering out short-term noise and giving the setup more structural weight. This technical setup is being matched by increasing relevance in the market structure.

Coinbase Q2 20225 chart

Source: X

As highlighted in Coinbase’s Q2 2025 earnings report, XRP accounted for 13% of trading revenue, surpassing Ethereum (12%) and Solana (10%). That figure climbed to 16% over the six-month period—despite Ethereum’s notable drop from 15% in the same timeframe last year. According to analyst Dom Kwok, this positions XRP holders as among the most impactful participants in the entire crypto space.

So, while intraday sentiment might favor the bears, the bigger picture is telling a different story—one of growing institutional presence, increasing dominance, and a possible macro breakout. For those zoomed out, the structure remains firmly intact.

Conclusion

In summary, XRP’s recent dip has stirred short-term uncertainty, but the broader picture remains far from broken. Beneath the surface, the market appears to be recalibrating—shaking out weak hands while long-term structures stay firmly in place.

On-chain signals, from cooling whale flows to shifting buyer-seller dynamics, reveal a market in transition rather than collapse. Meanwhile, XRP’s rising share of institutional trading and sustained dominance suggest growing relevance in the crypto landscape.

This moment may mark more of a pause than a pivot—a potential setup rather than a setback. As the dust settles, XRP’s next move could define its momentum for months to come.

Disclaimer: The information provided by CryptoTale is for educational and informational purposes only and should not be considered financial advice. Always conduct your own research and consult with a professional before making any investment decisions. CryptoTale is not liable for any financial losses resulting from the use of the content.

Related Articles

Back to top button