XRP: Is $0.16 the Lifeline? Flash Crash Fears Fade, Dull Sideways Trading Ahead

▲ XRP / ChatGPT-generated image

The leverage structure of the XRP market has been fundamentally reshaped, turning the strong leverage floor formed around $0.16 into a double-edged sword that not only acts as a shield against sharp price collapses seen in the past but also dampens expectations for a rapid rebound.

According to cryptocurrency media outlet CoinGape on February 25 (local time), the leverage floor established near $0.16 in the XRP market has emerged as a key psychological support level suppressing short-term price volatility. Virtual asset analysts, after reviewing recent changes in futures open interest and liquidation maps, concluded that the likelihood of a short squeeze—buying pressure triggered by the liquidation or covering of short positions—has diminished, significantly reducing the probability of sudden flash crashes. This suggests that the crypto market is gradually entering a more mature phase, moving away from its past speculative frenzy.

However, this structural stability paradoxically weighs on explosive price recovery. While a strengthened leverage floor enhances defense against downward pressure, it also makes it difficult to expect sharp rallies driven by large-scale liquidations during upward moves. Sentiment data indicates that XRP’s market sentiment index remains in neutral territory, with participants maintaining a wait-and-see approach rather than aggressively buying, awaiting clearer directional signals. A market environment cleansed of excessive leverage tends to make sudden rebounds more difficult.

Technical indicators also support XRP’s gradual trajectory. The Relative Strength Index is moving sideways between overbought and oversold levels, while the Moving Average Convergence Divergence indicator is converging without forming a distinct trend. Analysts emphasize that firmly defending the $0.16 support level is the top priority and note that even if short-term resistance levels are broken, XRP is more likely to undergo a step-by-step recovery rather than the vertical surges seen in the past. Although the price structure remains solid on higher time frames, the pace of liquidity inflow falls short of expectations.

While continued development within the XRP Ledger ecosystem and sustained interest from institutional investors are positive factors, broader regulatory uncertainty continues to hinder price appreciation. As the policy stance of U.S. President Donald Trump’s administration has yet to act as a direct catalyst for XRP, the market is closely monitoring tangible legislative outcomes and the results of Ripple’s legal efforts. With limited participation from retail investors, the movements of major whales are expected to become a crucial variable determining XRP’s future price direction.

XRP is currently navigating a new market environment shaped by both a technical bottom formation and changes in its leverage structure. As long as the $0.16 support level holds, the risk of a sharp collapse remains low; however, a full-fledged rally will require strong trading volume accompanied by policy support. Investors should focus on understanding structural market changes and confirming breakouts above key resistance levels, while maintaining conservative risk management rather than reacting emotionally to short-term price swings.

Disclaimer: This article is for investment reference only and we are not responsible for any investment losses resulting from it. The content should be interpreted solely for informational purposes.