XRP is showing signs of a potential recovery after one of its sharpest weekly declines in months.
Over the past week, the cryptocurrency shed more than $26.45 billion in market capitalization, falling from $198.19 billion to $171.74 billion as of August 20.
At press time, XRP was trading at $2.89, reflecting a 12% weekly decline and an additional 4% drop in the past 24 hours.
Why XRP is crashing
The correction has raised doubts about the durability of XRP’s rally after losing the crucial $3 support amid broader market bearish sentiment.
Whale activity has been a key driver of the downturn. In this case, wallets holding 10 million to 100 million tokens have offloaded 470 million since August 18, the largest distribution since July’s 660 million sell-off.
The latest wave of selling coincided with XRP slipping below $3, a level that has historically triggered 10% to 15% corrections, leaving the token vulnerable to further short-term weakness as large holders lock in profits.
Regulatory uncertainty is adding to the pressure. The U.S. Securities and Exchange Commission has delayed its ruling on pending XRP ETF applications until October 19, despite analysts earlier assigning a 95% probability of approval.
Meanwhile, Ripple’s pending banking license application, under review since July, has fueled additional investor caution.
XRP buy signal
However, technical signals suggest a possible rebound. According to analysis shared by Ali Martinez in an X post on August 20, the TD Sequential indicator on the daily chart has printed a “9” buy setup, a pattern often signaling potential trend reversals.
The same indicator recently flagged XRP’s most recent local top, lending weight to its current reading.
Price action shows XRP holding support around $2.80, with initial resistance at $3.10. If momentum builds, the next resistance levels stand at $3.25 and $3.50. However, a failure to maintain current support could open the door to deeper declines.
Featured image via Shutterstock
