XRP suffered a sharp sell-off on Friday, November 6, becoming the number one crypto loser in terms of market cap.
The token fell from around $1.3 to $1.18, losing roughly 9.3% of its value over 24 hours as a broader risk-off move across financial markets triggered a wave of leveraged liquidations in crypto.
Specifically, more than $1.2 billion in leveraged crypto positions were liquidated over the period in questionper CoinGlass. Bullish bets took the biggest hit. While XRP liqudations totaled just $23.21 million, futures took a heavy blow particularly affected, as open interest plunged 12.36%, suggesting traders rapidly closed or liquidated their positions.
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As a result, the asset lost approximately $7.8 billion of its total value, which dropped from $82.75 billion to $74.96 billion, according to CoinMarketCap.
AI concerns paint financial markets red
Concerns surrounding potential artificial intelligence (AI) regulation contributed to a sharp decline in U.S. equities, spilling over into digital assets and forcing traders to unwind riskier positions.
However, XRP’s decline was also reinforced by a technical breakdown. After failing to overcome resistance around $1.35, the cryptocurrency lost the $1.2-$1.21 support zone. The breakdown was also accompanied by a 51.7% increase in trading volume, which added to selling pressure.
Looking ahead, XRP’s immediate challenge is defending the $1.1-$1.15 support area. Holding this range could allow it to stabilize and potentially even enter a consolidation phase. On the contrary, a decisive break below it would expose the psychologically important $1 level.
XRP social sentiment turns negative
In the meantime, crypto analyst Ali Martinez noted that the “crowd is becoming increasingly bearish” on the asset, with social sentiment reaching its lowest level since July.
However, from his point of view, this could actually be a positive development. As the analyst argued, XRP might be developing a potential inverse head-and-shoulders bottom not yet recognized by traders.
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For now, though, the outlook remains bearish, with traders also watching the U.S. October jobs report for clues about broader market sentiment. A weaker reading could further reinforce risk aversion, while XRP’s ability to defend the above-mentioned $1-$1.15 zone may determine whether the sell-off turns into an even deeper correction.
Featured image via Shutterstock
