Key Takeaways:
- The XRP price saw a sharp, derivatives-driven crash, not a spot-selling event.
- Whales accumulated over 1.04 billion XRP, worth approximately $2.54 billion, during the price drop.
- Many retail traders reported being unable to buy XRP during the dip due to exchange limitations.
- On-chain data shows a potential for an XRP price rebound, with a target of $2.74.
The broader cryptocurrency market recently experienced one of its most severe deleveraging events in history. Ripple’s XRP was not spared. The altcoin saw a 60% drawdown, with its price dropping to as low as $1.2 on Binance perpetual contracts charts. This led to the liquidation of almost $1 billion in leveraged positions across the market in 24 hours.
The XRP price plummeted from $2.83 to $1.77 before showing signs of recovery and rebounding to $2.44. Despite the bounce, the token remained down approximately 14% over the 24-hour period.
Derivatives-Led Crash and Retail Lockout
On-chain data suggests the sharp decline in XRP’s price was not due to a mass sell-off by investors. The supply of XRP on exchanges remained stable throughout the crash.This indicates that the event was driven by panic in the derivatives market rather than spot selling. Over-leveraged long positions were liquidated as the price broke key support levels, triggering automated selling by exchanges.
During this period of intense volatility, many retail investors reported that they were unable to buy XRP. Some exchanges experienced temporary liquidity issues and delayed order executions, effectively locking out everyday traders from purchasing the asset at its lowest prices in months.
Whales Accumulate Amidst Market Chaos
While retail traders were on the sidelines, large-scale investors, or “whales,” were actively accumulating XRP. Blockchain analytics from sources like Whale Alert and Santiment detected a surge in large XRP transfers, some exceeding $20 million, during the market’s steepest decline. Wallets holding more than 1 billion XRP collectively added approximately 1.04 billion XRP, valued at around $2.54 billion.
This accumulation by “smart money” during a moment of panic is a classic market behavior that has historically preceded significant price recoveries. The Wyckoff Volume Spread Analysis (VSA) showed a transition from heavy selling pressure to a weaker selling control, a pattern that previously led to a 54% rebound for XRP in early May.
If this pattern holds, analysts are looking at a potential XRP price target of $2.74. The current consolidation above the $2.43 level is seen as a crucial step for a potential move toward the $2.59 and $2.82 resistance levels. However, a drop below $2.28 could signal further downside risk.
