• XRP gravitates to $2.89 intraday low before rising slightly above $3.00 amid rising risk-off sentiment.
• XRP’s spot volume remains neutral compared to the sell-off from its record high the previous week, suggesting seller exhaustion.
• Massive liquidations in the derivatives market could lead to a short squeeze, catalyzing XRP’s rebound.

Ripple (XRP) price rebound has been elusive after declining for three consecutive days. The sell-off in the broader cryptocurrency market left many holders and traders counting losses, with XRP currently trading at $2.98, or 16% from its record high of $3.66 reached on July 18.

XRP dips under $3.00 as liquidations surge

The XRP derivatives market is shaky following the lengthy correction from the all-time high. CoinGlass data highlights liquidations amounting to $41.4 million over the past 24 hours, with long position holders accounting for the lion’s share of $39 million. 

XRP Futures liquidation data | Source: CoinGlass

The subsequent drop in the futures Open Interest (OI) and volume underscores XRP’s upside-heavy structure, which could keep the price suppressed in upcoming sessions.

The notional value of all outstanding futures or options contracts averages $8.13 billion, representing a 26% drop from the July peak of $10.94 billion. This shows that fewer traders are betting on increases in XRP price. 

XRP Futures Open Interest | Source: CoinGlass

Technical outlook: XRP offers bearish signals 

XRP showcases a weakening technical structure on the daily chart, underlined by multiple bearish signals, including a downward-trending Relative Strength Index (RSI).

After peaking at 88 in overbought territory, the RSI sits slightly below the midline, which points to diminishing buying pressure. The downtrend could extend further toward the 50-day Exponential Moving Average (EMA), providing support at $2.77 if investors uphold the dominant risk-off sentiment in the broader cryptocurrency market.

A sell signal triggered by the Moving Average Convergence Divergence (MACD) indicator on Friday encourages investors to reduce exposure as they hope to buy XRP again at a lower price point. 

Risk sentiment could remain high as long as the blue MACD line holds below the red signal line, while the momentum indicator slides downward toward the mean line.

XRP/USDT daily chart

Key levels likely to stand out in upcoming sessions include support at $2.77 or the 50-day EMA and the pivotal $3.00 zone, as well as the resistance at $3.32. A break on either side of this range could determine the direction XRP takes in August. 

As for the low spot trading volume, which stands at $168 million at the time of writing, it indicates that seller exhaustion is kicking in. Therefore, an increase in speculative demand could have a positive impact on XRP price, reaffirming the bullish outlook toward the record high.

XRP Spot Bubblemap | Source: CryptoQuant 

CryptoQuant’s XRP Spot Bubble map backs the decrease in spot volume, as reflected on the chart. Low trading volume suggests fading liquidity characterized by fewer buyers and sellers. The price of XRP could consolidate near support at $3.00 before the next move plays out.