XRP loses $1.50 after explosive rally: why are traders taking profits now?

XRP slipped below $1.50 on Wednesday as traders took profits after a rapid cryptocurrency rally.

The token traded around $1.44-$1.48 after surging from roughly $1 to as high as $1.70 in less than a week, a gain of about 70% at the peak.

The reversal raised questions over whether the rally moved too quickly or exposed weaker spot demand.

$1.70 brought sellers back after a furious rally

XRP’s advance carried it into the $1.50-$1.70 region, an area TradingKey identified as a zone of previous peaks and concentrated trading volume.

That matters because investors trapped during earlier rallies were given another opportunity to exit, while short-term traders were sitting on large gains.

Bitcoin’s retreat after moving above $80,000 and elevated Bitcoin dominance also drained liquidity from altcoins.

FX Leaders analyst Arslan Ali Butt said consolidation after a roughly 72% advance was normal.

He identified $1.4287 as immediate support and $1.5328 as the level XRP needs to clear for “stronger momentum” towards another test of $1.70.

The setup is therefore less complicated than Wednesday’s drop might suggest.

XRP did not encounter a sudden deterioration in its fundamental story near $1.70. It reached a heavily traded resistance area after compressing months of potential gains into a few days, giving investors a strong incentive to take money off the table.

Leverage turned from fuel into a problem

The larger concern for bulls is how much of the rally was being amplified by derivatives.

CryptoQuant data cited by CCN showed Binance’s estimated XRP leverage ratio at its highest level in more than seven months.

CryptoQuant contributor Arab Chain said rising leverage alongside higher prices and open interest “could reflect increased confidence” and potentially support further gains.

That dynamic worked while XRP was climbing. Once the token stalled, the same leverage increased downside pressure.

CCN reported XRP futures open interest near $3.45 billion, with roughly two Binance accounts positioned long for every one short. Among top traders, the imbalance was closer to three-to-one.

About $18.9 million of XRP positions were liquidated over 24 hours, including roughly $15 million in longs. Futures generated about $6.4 billion in trading volume, versus around $1.2 billion in spot volume.

That imbalance helps explain the reversal.

ETF buying keeps the broader bull case alive

The correction is occurring despite evidence that regulated demand remains constructive.

FX Leaders reported that US-listed XRP products have recorded positive inflows for six consecutive weeks, including roughly $40 million in the latest week.

That matters because spot-based investment demand is generally more durable than leveraged futures positioning, while activity across crypto exchanges can be more sensitive to short-term shifts in sentiment and leverage.

Sustained ETF inflows could therefore help absorb some of the profit-taking pressure.

But bulls still need to regain control of key levels.

Butt sees $1.4287 as immediate support. Holding it keeps the short-term structure constructive, while a move above $1.5328 could reopen the path towards $1.70. A break lower could expose the $1.34-$1.35 region.