XRP’s price experienced one of the most significant declines of the year, dropping from $2.83 to a low of $1.77 in just a few hours before recovering to approximately $2.44.
Despite the recovery, the token remains down about 14% in 24 hours and nearly 20% for the week. However, this decline was not due to typical market selling; it was driven by panic and derivatives activity, rather than actual token sales. As XRP’s price begins to rebound, a key group is seen increasing their token holdings.
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Panic-Led Derivatives Crash, Not Spot Selling
On-chain data indicates that this was not a mass sell-off by investors.
In the past month, the supply of XRP on exchanges has remained relatively unchanged, even during this drastic decline, suggesting that very few coins were transferred to exchanges for sale.
Instead, the downward spiral likely originated in the derivatives market, where over-leveraged long positions were liquidated as prices breached significant support levels. This results in exchanges automatically closing futures contracts, leading to forced selling on order books, despite no tokens moving on-chain.
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This off-chain panic is evident in the Wyckoff Volume Spread Analysis (VSA): a large red bar formed at the peak of the liquidation surge, followed by yellow bars as selling pressure decreased.
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The transition from red (indicating full selling dominance) to yellow (indicating decreased selling pressure) typically suggests that forced liquidations are subsiding.
Wyckoff Volume Spread Analysis (VSA) monitors the relationship between price and volume to indicate whether buying or selling pressure is more pronounced. VSA does not identify the source of volume; it does not differentiate between spot selling and derivative-induced liquidations.
The last occasion XRP’s Wyckoff bars showed a similar transition from red to yellow in early May, the token rebounded over 54% from its lows. If this pattern repeats, a comparable rebound could occur once the panic subsides, establishing a target price of $2.74 for XRP.
Whales Accumulate as the Market Cools
While smaller traders were being sold off, whales were discreetly buying.
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Data from Santiment reveals that wallets holding over 1 billion XRP increased their holdings from 23.98 billion to 25.02 billion following the crash — an increase of around 1.04 billion XRP, valued at approximately $2.54 billion at the current XRP price.
This behavior aligns with the on-chain data: the absence of a significant spike in exchange balances, coupled with rising whale holdings, indicates that this was not a case of spot selling — it was a derivatives panic countered by whale accumulation.
It’s worth noting that the stable exchange supply also supports this narrative. Large holders typically acquire through OTC deals or internal swaps, meaning their accumulation does not immediately reflect as on-chain exchange outflows.
Such scenarios often characterize the bottom phase of a sentiment-driven crash, where strong hands absorb the weak hands before a recovery commences.
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XRP Price Eyes “This Rebound Target” as Recovery Builds
Currently, XRP is priced at $2.44. This level is consistent with the 0.5 Fibonacci retracement level from the previous swing high to the $1.70 zone, the latest multi-week low.
If XRP can close above $2.43 daily, it bolsters the structure for an advance towards $2.59, potentially followed by $2.82 (a crucial resistance level). This aligns with the Wyckoff prediction of exceeding $2.74, as shown in the chart above.
Conversely, a drop below $2.28 would weaken this setup and heighten the risks of falling to $2.05.
Given the whale accumulation, stable exchange supply, and the easing of panic liquidations, the data reflects a notable sentiment shift. This was not an actual capitulation; rather, it was a sentiment-induced washout that could pave the way for XRP’s next short-term rebound.
