Crypto Alert: XRP Faces Potential 10% Drop Amid Regulatory Uncertainty and Technical Pressure

• Why Is XRP Under Selling Pressure?
• The Technical Case for an Imminent Correction
• Liquidity Crunch: The Ticking Time Bomb
• ETF Speculation Adds Fuel to the Fire
• Key Levels to Watch
• XRP Price Action Q&A

XRP is teetering on the edge of a critical technical threshold as regulatory ambiguity and bearish signals converge. Analysts warn of an 8-10% correction toward $2.50, but on-chain data reveals a concentration of buyers at this level that could spark a rebound. With liquidity compression signaling imminent volatility and ETF speculation adding fuel, XRP’s next MOVE could be explosive—but which way? Here’s the breakdown.

Why Is XRP Under Selling Pressure?

XRP is currently trading NEAR a make-or-break level at $2.75, a support tested multiple times in recent weeks. The BTCC research team notes that failure to hold this zone could trigger a cascade of stop-loss orders, pushing prices toward the $2.45-$2.50 range—a 10% drop from current levels. This area coincides with:

• A Fair Value Gap (FVG) where liquidity clusters
• The 0.50-0.618 Fibonacci retracement zone
• High-density holder activity per Glassnode data

Ironically, the same factors making XRP vulnerable to a drop could also set the stage for a rebound. As one trader quipped on crypto Twitter: "This isn’t a chart—it’s a coiled spring waiting to snap."

The Technical Case for an Imminent Correction

Three red flags are flashing for XRP bulls:

1. Fragile Support: The $2.75 level has shown weakening bids since September 22, with decreasing volume on each test.
2. Liquidity Gaps: Order book data from TradingView shows thin support between $2.70-$2.60, creating a potential "air pocket" for rapid declines.
3. Bearish Divergence: The RSI has formed lower highs while price made equal highs—a classic warning sign.

However, the $2.50 zone presents a paradox. While technicals suggest it’s a likely downside target, on-chain data from Coinmarketcap reveals that 42% of XRP wallets bought between $2.45-$2.55. These holders may defend their positions aggressively.

Liquidity Crunch: The Ticking Time Bomb

Sistine Research’s September 24 analysis highlights XRP’s third liquidity compression since November 2024—a pattern that historically precedes violent breakouts. The firm’s tweet showing progressively tighter price ranges has gone viral:

"Expecting a large expansionary move from XRP soon. As price compresses, so does the orderbook... resulting in very large gaps in liquidity."

This compression mirrors conditions seen before:

The current squeeze has lasted 9 days as of September 28—putting XRP in the danger (or opportunity) zone.

ETF Speculation Adds Fuel to the Fire

While technicals paint a concerning picture, the looming Franklin Templeton ETF decision on November 14 could change everything. The REX/Osprey XRP ETF’s $38M debut volume shows institutional interest exists—but is it priced in? Pelin Ay’s analysis of 90-day CVD data suggests sellers still dominate, meaning any ETF approval surprise could trigger massive short covering.

As one BTCC analyst put it: "We’re either looking at a bear trap or a bull trap—the compression is so extreme, the move could go either way."

Key Levels to Watch

For traders navigating this volatility:

• Bullish invalidation: A close above $2.90 negates the bearish setup
• Bearish confirmation: Sustained break below $2.70 opens path to $2.50
• Wildcard: Any regulatory news could override technicals

This article does not constitute investment advice.

XRP Price Action Q&A

How low could XRP drop?

The $2.45-$2.50 zone represents an 8-10% decline from current levels and aligns with multiple technical factors including Fibonacci levels and on-chain support.

What would trigger an XRP rebound?

Three factors could spark recovery: 1) ETF approval news, 2) defense of the $2.50 level by concentrated holders, or 3) a broader crypto market rally.

Is this a good time to buy XRP?

With extreme volatility likely, traders might wait for either a confirmed breakdown below $2.70 or a reversal signal from the $2.50 support zone.