The price of XRP fell sharply on Thursday, dropping 19 percent from its recent multiyear high. Despite the steep decline, analysts are describing the move as a healthy correction within the broader crypto market, which has also experienced notable losses over the past 24 hours.

XRP Declines After Reaching Multiyear High

XRP’s price fell to an intraday low of $2.95, down from its recent peak of $3.66, according to TradingView data. At the time of writing, XRP is down 12.5 percent on the day, trading around $3.13. The broader crypto market also saw a decline of 3 percent over the past 24 hours, bringing the total market capitalisation to $3.79 trillion.

The correction follows an extended rally in XRP, which analysts believe led to overheated market conditions. The relative strength index (RSI), a key technical indicator, showed that XRP was significantly overbought last week, peaking at 88 on Friday. The RSI has since dropped to 61 on the weekly chart and 56 on the daily chart, indicating a weakening in bullish momentum.

Liquidations Top $1 Billion Across Crypto Market

The price drop triggered a wave of liquidations across the crypto market, totalling nearly $1 billion in the past 24 hours. XRP alone saw $113.6 million in liquidations, with $106.8 million coming from long positions. The largest liquidation losses came from Ether, which recorded $195 million in liquidations, including $168 million in longs.

Cascading liquidations and declining liquidity were cited as primary drivers of XRP’s sharp fall. Over-leveraged traders were forced to exit positions due to margin calls, leading to a chain reaction of automated sell-offs. Analysts note that such events can often amplify volatility and trigger steep price movements in a short period.

However, some believe that the scale of liquidations may point to a near-term market bottom. “Although we didn’t reach the $1 billion mark that historically signals a local bottom, the recent volatility might be enough,” commented CryptoData, a pseudonymous analyst, on X.

Technical Levels and Market Outlook

XRP’s $3 level is currently acting as a support, coinciding with the 100-period simple moving average. Should this level fail to hold, analysts warn that XRP may fall further to test the 200-period SMA at $2.60. Still, many see the current decline as an opportunity for accumulation.

“Recent formation broke with significant selling volume, but buyers quickly stepped in with aggressive purchases,” said market analyst Egrag Crypto. “Don’t let fear take over now. Stay strong and hold your position.”

Other analysts echoed this sentiment, suggesting that the pullback is a natural part of market cycles and may set the stage for another rally. Analyst XRPunkie called it a “healthy correction” and said the current pause could lead to a strong upward movement in the near future.

Bullish Targets Still in Sight

Despite the correction, bullish price targets for XRP remain intact. Analysts still see the possibility of XRP reaching between $10 and $15, depending on broader market trends and investor sentiment.

“Sit back, chill and relax,” said XRPunkie. “Let it bottom out, and we should be on our way to much higher prices real soon. $10 to $15 is still in play.”

Crypto analyst Dom also offered a bullish projection, suggesting XRP could top out between $7 and $10 depending on its market dominance. Lukas Enzersdorfer-Konrad, deputy CEO of Bitpanda, added that XRP is still on track to surpass its 2018 all-time high. He cited strong liquidity and growing confidence in altcoins as reasons for optimism.

A Short-Term Setback or Long-Term Opportunity?

While short-term traders may view the recent decline with concern, many market watchers see this as a necessary adjustment. XRP’s recent surge placed it in overbought territory, and the pullback may allow the asset to consolidate before making another attempt at higher levels.

With nearly $1 billion in liquidations flushing out over-leveraged positions, some analysts believe the crypto market is now better positioned for a stable rebound. XRP’s ability to hold above key support levels will be crucial in determining its next move.

For now, the sentiment among analysts remains largely positive. As volatility subsides and market momentum resets, XRP may yet resume its upward trajectory in the days ahead.