Key Takeaways
XRP steadied above $1.10 on Sunday after a brutal market-wide flush erased roughly $5 billion in leveraged positions across crypto exchanges, with analyst Will Taylor arguing that the liquidity setup now favors a violent reversal rather than further downside.
"Downside liquidity has largely been swept. The larger liquidity pools now sit above current price, which creates the conditions for a sharp move higher if buyers step in," Taylor, an independent crypto analyst known as @CryptoinsightUK, said.
The token fell to $1.08 on Friday — its lowest since November 2024 — as a stronger-than-expected US jobs report triggered a cascade of liquidations. Bitcoin briefly plunged below $60,000 to $59,100, dragging XRP alongside it. But XRP held above the psychologically important $1 level, bouncing to trade near $1.14 as of 06:00 UTC Monday, according to CoinGecko data.
The question now is whether the bounce has legs. XRP remains down roughly 69% from its July 2025 cycle high of $3.65, and the broader trend has not turned. But beneath the surface, several signals point to accumulation. Spot XRP ETFs pulled in a record $131.94 million in May, bringing cumulative inflows to $1.43 billion, even as Bitcoin ETFs bled $4.4 billion over 13 consecutive sessions. More than 25 million XRP moved off exchanges in recent days, and wallets holding at least 10,000 XRP hit a record 332,230 addresses, according to Santiment data.
The Liquidity Setup
Taylor's thesis rests on the concept of liquidity sweeps — a pattern where price moves to take out stop-losses and leveraged positions clustered at key levels before reversing. Friday's flush swept bids below $1.10, clearing out weak longs. With that downside liquidity now exhausted, the next major pools sit above $1.20, where short positions have accumulated.
Coinglass data shows short positions on XRP outweigh longs by roughly nine to one across major exchanges, a skew that could fuel a short squeeze if price pushes higher. However, the setup cuts both ways. Binance's 30-day liquidity index for XRP has dropped to 0.043, its lowest since January 2020 and roughly 1% of the levels seen during 2022-2024. Thin liquidity means any directional move — up or down — will be amplified.
What Could Stop the Reversal
The biggest headwind is Bitcoin. XRP has historically fallen 1.3 to 1.6 times more than BTC during downturns, and while that ratio has compressed to 0.87 over the past 30 days — suggesting some decoupling — XRP cannot sustain a recovery without Bitcoin stabilizing first. Polymarket currently prices a 64% chance Bitcoin tests $55,000 before year-end, which would put XRP near $1.05 under the current ratio.
Ripple's June 1 monthly escrow unlock added 200 million to 400 million XRP in net new supply to a market that was already under pressure. And XRP ETFs recorded their first net outflow since April 30 on June 3, a modest $5.34 million withdrawal that broke a five-week inflow streak.
The Levels That Matter
For a reversal to gain traction, XRP needs to clear $1.20 — the upper boundary of its current descending channel and the level where most short positions are clustered. A move above that would open a path toward $1.50, with the CLARITY Act — which would classify XRP as a commodity under federal law — serving as the next major catalyst if it gets scheduled for a Senate floor vote before the August recess.
On the downside, $1.09 to $1.10 is the immediate support zone. A daily close below $1 would target $0.95, with the $0.75 to $0.85 range representing the next major accumulation zone from prior cycles.
This article is for informational purposes only and does not constitute investment advice.
