XRP, the cryptocurrency used for cross-border payments on Ripple's network, is leading the broader crypto market lower as leveraged positions unwind, with the token giving back a chunk of its recent rally faster than any other top-10 cryptocurrency.

The mechanics of that unwind matter for how the retreat plays out. Leverage means trading with borrowed money; when prices turn against overextended positions, exchanges automatically force-close them—a process known as liquidation—and the resulting forced selling can compound a move lower, which is why rallies built on borrowed funds often give back ground faster than they climbed.

Crypto markets are digesting a big week. Bitcoin cleared $80,000 on Tuesday for the first time in months before cooling toward the $78,000 zone on Wednesday, and traders are bracing for tonight's core PCE inflation data—the Federal Reserve's preferred gauge of underlying price pressures—and Nvidia's earnings report, the AI chipmaker's results serving as a closely watched read on risk appetite across tech-heavy trades. The two catalysts are likely to set the tone heading into Jackson Hole, the Federal Reserve's annual economic symposium in Wyoming, where investors parse policymakers' remarks for signals on the direction of interest rates.

Risk appetite has broadly improved this month, but not every token is riding the wave evenly. XRP, in particular, is surrendering its gains faster than the rest of the market.

The token is down 6.23% over the past 24 hours to around $1.38—the worst showing among the ten largest cryptocurrencies by market capitalization, according to CoinMarketCap data.

That marks a sharp reversal for a token that was, until this week, the market's standout. XRP remains up 35.55% over the past seven days, trailing only the 38.65% weekly gain of Hyperliquid, the native token of a decentralized trading platform, among the top 10, and comfortably outpacing Bitcoin, Ethereum, and every other major coin.

The pullback traces back to how quickly the rally built up. XRP rocketed from around $1.00 on August 18 to an intraday high near $1.69 just four days later—a move so aggressive it briefly touched the psychologically important $1.70 mark before Bitcoin's own retreat from its $80,000 high began dragging altcoins lower across the board.

There is one bright spot. XRP-linked ETFs—traditional funds that track the cryptocurrency's price without the need to hold it directly—have logged nine straight days of net inflows, suggesting the current weakness is a leverage problem rather than institutions heading for the exits. Flow data of this kind has become a standard proxy for institutional sentiment in crypto since U.S. spot Bitcoin ETFs launched in January 2024, pulling traditional asset managers into the market at scale.

Leverage catches up with the rally

On the daily chart, XRP opened at $1.4344, tagged a high of $1.4513, and is now trading near $1.3790—down 3.86% on the candle itself (the current day being traded, not the trailing 24 hours).

That puts the price right back at the $1.40 zone that flipped from resistance to support during last week's breakout—the same level where XRP first reclaimed its 200-day exponential moving average, a milestone chart watchers flagged as an early sign of a possible trend reversal. Whether $1.40 holds now will decide if this remains a healthy pullback or turns into something uglier.

The indicators are sending mixed signals. The Relative Strength Index (RSI), which measures how overbought or oversold an asset is on a 0–100 scale, sits at 66.7—still bullish, but closing in on the 70 line where traders typically begin booking profits.

The Average Directional Index (ADX), which measures trend strength regardless of direction, is running hot at 44.1—well above the 25 threshold that confirms an actual trend is in place—with the positive directional line (DI+) still reading above the negative one (DI-), a bullish tilt.

The moving averages, however, disagree. The chart's long- and short-term averages (measured as EMA 200 and EMA 50) still show the shorter-term average sitting below the longer-term one—a structural holdover from the broader downtrend that has defined XRP's chart for most of the year, even as price staged its sharpest rally in months on top of it.

Bitcoin's ability to hold the $77,000–$78,000 zone will matter for every altcoin, XRP included, and tonight's PCE print and Nvidia earnings are the next scheduled catalysts that could move that needle in either direction.

For XRP specifically, the fight is narrower and more immediate: hold $1.40, and the seven-day rally stays intact as a normal cooldown. Lose it on a daily close, and the token's own short-side signals suggest sellers could press toward the lower boundary of the support zone that has built up since August's breakout.

The views and opinions expressed by the author are for informational purposes only and do not constitute financial, investment, or other advice.

Source: Decrypt