XRP in Freefall! Is Ripple Facing a Crypto Apocalypse?

The remittance-based cryptocurrency, XRP, fell 4% over the last 24 hours, resulting in $18 million worth of XRP futures being liquidated. Long positions accounted for $11 million of that, while short positions accounted for $7 million of that. The overall crypto space has been tumultuous recently, and XRP is one of the affected assets.

Trump’s Tariff Announcement Increases Market Uncertainty

XRP experienced a price drop at the same time that uncertainty from Donald Trump’s announcement of reciprocal tariffs was introduced to the market. The news caused a broad-based selloff of digital assets, negatively impacting the market sentiment, and as such, the $2 price level has become an essential support area for XRP traders and investors.

Key Support Levels: Why $2 Matters for XRP

XRP is currently navigating a crucial support zone. If the token fails to hold above $2 and its 200-day simple moving average (SMA), it risks dropping further to the $1.5 support level. Analysts believe that breaking below these levels could lead to increased volatility, potentially pushing the price into a downward spiral.

Conflicting On-Chain Metrics: Bearish or Bullish?

While indicators from technical analysis are spotted in the red zone, the on-chain data shows a nuanced picture. The Market Value/Realized Value (MVRV), which indicates the comparison between an asset’s market price and its historical market-based cost basis, has dropped below its 200-day moving average, suggesting it may be bearish that the market value is less than the average cost investors in XRP acquired their positions. On the other hand, whale accumulation shows some large investors are still speculating for a long-term increase, as some high-net-worth (HNW) investors are still barrier into the market at the falling price, indicating that they may see upside recovery in the rest of the cryptocurrency space.

Bearish Indicators Could Trigger High Volatility

Currently, XRP’s market cap is below its realized value, which may indicate a time of consolidation or further corrections that have preceded downturns in the past. If XRP is not able to hold the key support levels, it could enter a high-volatility zone, making any meaningful recoveries more difficult.

Will XRP Bulls Hold the Line?

Amidst the current volatility in the market, the question of whether bullish investors will be able to defend the $2 support level is an open question. If this level is successfully defended, it may serve as a launch point for a bounce/bullish action in the price of XRP. A dip below $2 would lead to a long period of sideways price movement, albeit with an increased possibility of a downward price action. The cryptocurrency market can continue to remain as dynamic as ever. Some of the indicators point to bearish momentum occurring while the activity of whales continues to remain higher, and the activity of the broader market will determine the price action of XRP.