The cryptocurrency market is watching XRP closely after new technical indicators began flashing oversold signals, even as many traders continue aggressively shorting the asset, News.Az reports, citing Blocknews.
According to market analysts, XRP is entering a critical phase where bearish sentiment dominates trading activity, but technical indicators suggest a potential rebound may be forming.
XRP has been under pressure for months. The token has dropped sharply from its 2025 highs above $3 and recently traded near the $1.3–$1.4 range, reflecting sustained selling pressure across the crypto market.
***
At the same time, traders in derivatives markets have increasingly opened short positions, betting that the price will fall further.
However, some analysts say the market may be approaching a turning point.
Oversold signals begin to appear
Technical indicators now show XRP approaching oversold conditions — a signal that often precedes a market bounce.
One of the most widely used indicators, the Relative Strength Index (RSI), is designed to identify when an asset has been overbought or oversold, helping traders anticipate potential reversals.
Recent analysis shows XRP previously dropped to an RSI near 28, a level widely considered oversold in financial markets.
Historically, such conditions have sometimes triggered strong rebounds.
Crypto analysts note that when XRP has reached similar oversold levels in the past, the token often experienced a sharp recovery shortly afterward, with some projections suggesting a possible move back above $2 if momentum shifts.
Buyers quietly return to the market
Despite the bearish sentiment, some data suggests buyers are slowly stepping back into the market.
Recent derivatives trading activity showed buyers executing slightly more XRP orders than sellers, creating a positive imbalance that may indicate a gradual shift in momentum.
This development has led some traders to believe the current downturn may be nearing exhaustion.
What comes next for XRP
Analysts say the next few weeks could be decisive for the cryptocurrency.
Several scenarios are now being discussed in the market:
• In a bearish case, XRP could remain stuck between $1.00 and $1.40 if no major catalysts emerge. • In a base-case scenario, the token could recover toward $2.50–$4 if market sentiment improves and adoption continues to grow. • In a bullish scenario driven by institutional demand and regulatory clarity, XRP could move even higher.
For now, the market remains divided.
Short sellers are betting the decline will continue — but oversold signals suggest that a sharp rebound could catch many traders off guard.
If that happens, XRP could stage one of the most dramatic short squeezes in the crypto market this year.
