The price of XRP has faced a severe pullback in recent sessions, triggering widespread panic selling across the market, and this decline has further intensified negative sentiment among investors as everyone rushed to cut their losses
Nonetheless, this intense selling has pushed XRP into over-sold territory, a condition that typically attracts investors looking to buy during price dips for short-term recovery opportunities.
XRP holders are selling to reduce losses.
On-chain profit/loss data shows that losses have continued to dominate XRP trading activity over the past 20 days. Many investors sold off as prices rose slightly, hoping to exit near breakeven. However, as the downtrend persisted, selling pressure intensified to avoid deeper losses.
Over the past week, sell-offs driven by losses have intensified further, with most XRP transactions occurring below investors' cost basis, reflecting panic rather than rational portfolio adjustments. Historically, such conditions signal a phase of capitulation, where weaker holders exit the market—similar to what appears likely for XRP at this time.
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The Money Flow Index, which tracks buying and selling pressure using price and volume, has entered over-sold territory over the past 24 hours, indicating that selling pressure may be starting to ease.
In the past, such moves into over-sold territory have often created tactical buying opportunities for investors, especially when panic selling reaches peak levels. Value-focused investors typically accumulate during such periods. Although this phenomenon does not guarantee a reversal in XRP's price trend, it often leads to short-term rebounds as selling pressure eases and demand stabilizes.
XRP is trading near $2.14 as of this writing, showing signs of short-term recovery in the early stages. The Fibonacci retracement level drawn from the most recent high to the low serves as a key reference point. The current structure suggests buyers are attempting to regain control after an over-sold signal.
This altcoin has already established a support base above the 23.6% Fibonacci level, further reinforcing the recovery trend. If a confirmed uptrend develops, XRP must overcome the 61.8% Fibonacci level near $2.27 to turn it into support. Successfully doing so would open the path toward $2.41 and help the price recover from recent losses.
Nevertheless, downside risk remains if support weakens. If XRP fails to hold above the 23.6% Fibonacci level, it could face renewed selling pressure, potentially dropping to $2.03. If this level is broken, XRP is expected to fall below $2.00—a psychological support level—leading to further declines and possibly erasing the uptrend.