XRP just gave traders the exact move everyone had been bracing for. After ripping close to 70% in a week - from $0.98 to $1.70 - the token turned around and shed nearly 7% in 24 hours, dragging the broader market lower with it.
What interests me isn't just the size of the drop. Daily RSI had spiked to 88, a level last seen near the July 2025 all-time high, right before the reversal hit. That combination usually means the market needs to breathe, not that the trend is over.
Leverage adds another layer. XRP leverage ratio just hit a 7-month high, with longs outnumbering shorts almost two to one - fuel for the rally on the way up, but forced selling once price stalls, which likely explains how fast this drop moved. ETF inflows have stayed positive for six straight days though, so the underlying demand story hasn't broken.
On the chart, I'm watching $1.40 closely. That's the level separating a normal pullback from a deeper correction - lose it on a daily close and the next stops are $1.30–$1.20, with $1.00 and the $0.9327 fib level in play if things get ugly.
A reclaim of the 50 SMA (around $1.50–1.54) paired with a bullish MACD cross keeps the long setup interesting - entry near $1.43–1.45, stop just under $1.4287, target into the $1.49–1.54 zone. I wouldn't chase a vertical bounce here; after a squeeze this aggressive, I'd rather see RSI cool off first. The mirror setup plays out below the SMA, with a bearish MACD cross confirming a breakdown and $1.34–1.35 as the first target.
Longer term, a reclaim of $1.5328 opens the door back to $1.70, and beyond that, $1.88 lines up with the next Elliott Wave target some analysts have tracked since early last year.
I've traded enough of these post-rally shakeouts to know the size of the prior move gets more attention than the setup that follows it. For now, I'm watching whether $1.40 holds as support or turns into resistance - either answer tells me a lot about what comes next.
Disclaimer: Trading crypto involves substantial risk, and this is only my personal read of XRP's structure, not financial advice. I always define invalidation before entering, size positions carefully, and accept that price can do something different from my base case.
