XRP has dropped under the key $3 support level for the first time in weeks, raising concerns of further downside pressure. Heavy whale activity and weak buying momentum are amplifying selling pressure, leaving investors cautious about the token’s short-term outlook.

XRP Breaks Crucial Support

The third-largest cryptocurrency by market capitalisation has been under pressure throughout the past week, falling 10% in the last seven days. On August 19, XRP confirmed a breakdown from a symmetrical triangle pattern that had been forming since the start of the month.

The token fell below the triangle’s lower trendline, pushing prices under the $3 mark, a level that had provided reliable support since early August. Technical indicators confirm this weakness. The Bull Bear Power (BBP) flipped into negative territory on August 18, signalling that sellers currently dominate market conditions.

With momentum tilting in favour of bears, XRP’s next support levels could come into play at $2.89, $2.76, and even $2.21. Meanwhile, $3.33 remains a firm resistance that the token has repeatedly failed to break.

Whale Activity Fuels Decline

While technical weakness is weighing on the price, large holders commonly referred to as whales are adding to the selling pressure. On-chain data from Santiment reveals that wallets holding between 10 million and 100 million XRP have trimmed their balances from more than 8 billion tokens to 7.59 billion.

This reduction equates to about 470 million XRP offloaded in just a few days, worth approximately $1.35 billion at recent prices. Such large-scale distribution typically exerts significant pressure on price action, as it increases supply in the market while dampening sentiment.

If whales continue selling, XRP may face sustained downward pressure as the market struggles to absorb excess tokens. This could delay any recovery attempt, especially without strong buying interest from retail or institutional investors.

Technical Indicators Signal More Downside

Looking at broader technical signals, XRP’s outlook remains fragile. The daily chart shows a bullish pennant formation, often seen as a continuation pattern that can precede another breakout. However, the lack of buying volume is preventing the pattern from confirming an upside move.

At the same time, the Moving Average Convergence Divergence (MACD) has issued a bearish crossover, with the 12-day EMA slipping below the 26-day EMA. This shift signals building negative momentum, which could accelerate losses if the trend persists.

If sellers maintain control, XRP risks sliding towards $2.45, the 0.618 Fibonacci retracement level. A break below this point would expose the token to deeper losses, potentially taking it under $2.

Can XRP Recover?

Despite the current bearish pressure, a recovery remains possible if market dynamics shift. An increase in accumulation from whales, combined with stronger retail demand, could help XRP reclaim lost ground. Breaking above the triangle’s upper trendline and the pennant formation would be the first step towards recovery.

If this bullish scenario plays out, XRP could rally back towards $3.66, with $3.33 acting as the key breakout barrier. Until then, however, investors should expect heightened volatility and potential further downside.

XRP’s fall below $3 has marked a significant shift in market sentiment, with whales playing a major role in driving the decline. Technical charts suggest that further weakness is possible unless buying pressure returns soon. For now, traders and investors will be watching support levels closely to gauge whether XRP can stabilise or if the selloff has more room to run.