Warning: The Reason Why XRP Regaining $3 Could Be Bad News

XRP is at a critical level in the market as traders prepare for the potential volatility around the $3 mark. Analysts warn that large short sell order groups above the current price could trigger a wave of liquidation if this token rises higher, setting the stage for a strong bullish rally due to selling pressure. The token is currently trading at $2.86, down 1.53% from yesterday and nearly 8.91% over the past week. Resistance has formed between $2.90 and $2.95, creating a narrow range that keeps the market from reaching the $3 threshold. Trading volume remains high, over $4.6 billion in the past 24 hours, making XRP one of the most liquid digital assets despite the recent price drop.

Regulatory Flow and Signals on the Chain On-chain data shows that large investors are still actively participating in the market. Recent trading sessions witnessed a spike in the trading volume of XRP to 155 million tokens, significantly higher than the average of 63 million, indicating stable participation from institutions even as prices experience a slight decline. Data also shows that long-term XRP holders are taking profits during the correction. Actual profits have exceeded 2 billion since the most recent downturn began, indicating that the distribution process is still ongoing. This follows a familiar pattern: at the end of July, XRP holders took profits of over 375 million in just one day when the price briefly hit 3.55, resulting in the sharpest decline in months.

Whales, Liquidity and Short-Term Risks The market heat map shows that liquidity is accumulating significantly above the $3 level, which analysts believe could become a breakout point. If buying pressure pushes XRP above the resistance level, a series of forced liquidations could amplify the momentum and push the price higher.

At the same time, the liquidity group from $3 to $4.50, existing after the bullish rally in July, is currently acting as a resistance zone that buyers must overcome. According to on-chain data, over 94% of XRP holders are currently in profit, a figure often seen near cycle tops. While this reflects strong investor confidence, it also increases the risk of sell pressure as traders take profits. Analysts warn that this move puts XRP in a zone that some call "from belief to denial," where bullish sentiment can quickly turn into doubt if the upward momentum stalls. Prospect Currently, the future of XRP depends on the resistance level of 3 dollars. A decisive breakout above this level could trigger a strong sell-off, but failing to reclaim this level could lead to a deeper retracement as profit-taking continues. With ample liquidity and whales still active, the next move could be very powerful. Traders are closely monitoring the range of $2.90–$3.00, as a clear breakout could shift the advantage in favor of the bulls, while another rejection could deepen the correction.