Ripple Bears Beware: $3 XRP Could Unleash a Tsunami of Liquidations
XRP's surge toward $3 isn't just a rally—it's a potential wrecking ball for bearish positions.
The Liquidation Domino Effect
Short sellers face catastrophic margin calls as XRP approaches that critical threshold. We're talking about a cascade of forced closures that could amplify buying pressure exponentially. The higher it climbs, the more positions get liquidated—creating a self-fueling upward spiral.
Market Mechanics at Breaking Point
Exchange leverage works both ways. While traders chase profits on long positions, over-leveraged bears risk getting completely wiped out. This isn't speculation—it's basic market physics. When too many bets align against momentum, the snap-back can be brutal.
Wall Street's Favorite Paradox
Traditional finance types still don't get it—they keep treating crypto volatility like a bug rather than a feature. Meanwhile, decentralized markets keep doing what they do best: separating overconfident traders from their capital with ruthless efficiency.
Watch those price levels. When XRP hits $3, the real fireworks begin.
$3 Level Poses Risk for Short Traders
Market analyst CW has pointed out that if XRP climbs to $3, a large number of short positions could be wrecked. A heatmap of liquidity shows heavy concentration at that level, suggesting it may act as a trigger point for forced closures. Such a MOVE could create rapid upward momentum if shorts are squeezed out.
When $XRP reaches $3, a large number of short positions will be liquidated. pic.twitter.com/7NspGqkgRU
— CW (@CW8900) August 22, 2025
At the moment, XRP is trading below that mark, fluctuating between $2.85 and $2.95. The $2.90–$2.95 area has formed as near-term resistance. A clean break above this zone WOULD put $3.00 back in play and raise the risk of a liquidation wave.
XRP is priced at $2.87 with a daily trading volume of $4.67 billion. It has fallen 1% over the past 24 hours and is down 8% in the last seven days. Trading activity remains strong, keeping Ripple’s token among the most liquid assets in the market.
On-chain figures show larger players have been active. Institutional-sized flows pushed XRP turnover to 155 million during recovery sessions, well above the 63 million daily average. This increase suggests steady participation even as prices are corrected.
Profit Taking by Long-Term Holders
Glassnode data shows long-term holders have been locking in gains. Realized profits topped $2 billion during the recent pullback, pointing to heavy distribution into consolidation phases.
This pattern is not new for XRP. On July 24, profit-taking spiked to $375 million as the token peaked NEAR $3.55. That event led to a 10% daily drop, the sharpest single-day decline in more than three months. Current activity suggests a similar positioning as the price hovers below $3.
Technical Indicators and Ripple Update
Analyst Ali Martinez noted that the TD Sequential indicator has turned bullish on XRP’s hourly chart. The same signal correctly identified the peak at $3.65 in July. Its latest reading suggests the potential for a short-term rebound.
After perfectly calling the top, TD Sequential flips to buy on $XRP! pic.twitter.com/f69FXPJPWR
— Ali (@ali_charts) August 22, 2025
At the same time, market pressure has weighed on digital assets, with $360 million liquidated across the sector in recent days. XRP has continued to attract buyers at support levels, showing resilience despite the broader selloff.
Separately, Ripple Labs has confirmed a new agreement with Japanese financial group SBI Holdings. Under the memorandum, SBI VC Trade will begin distributing Ripple’s stablecoin RLUSD in Japan starting in the first quarter of 2026.
