XRP approaches $2 as oversold signals appear suggesting a corrective bounce

The price of XRP has faced a sharp decline in recent sessions, inducing panic selling in the market. This decline intensified the bearish mood as investors rushed to limit losses.

However, this heavy selling has pushed XRP towards oversold territory, a condition that often attracts buyers looking for short-term recovery opportunities.

XRP holders sell to prevent losses

On-chain P/L volume data indicates that losses have dominated XRP trading activity over the past 20 days. Many investors initially sold during short price rallies, hoping to exit their positions near the break-even point. As the downtrend continues, selling pressure increases to avoid deeper declines.

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Last week saw more accelerated loss driven selling. male A large part of XRP conversion Investor cost bases have been reduced, reflecting fear rather than strategic repositioning. Historically, such conditions indicate capitulation phases, where weak investors exit the market, and this is probably the case with XRP currently.

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The money flow index, which tracks buying and selling pressure along with price and trading volume, has fallen into oversold territory in the past 24 hours. This indicates that the intensity of sales may be reaching exhaustion.

Similar oversold readings have proven in the past to have provided tactical entry points for buyers. When panic selling peaks, value-focused investors often switch to buying. Although that doesn’t guarantee it will happen Trend reversal for XRPHowever, it often supports a price rebound in the short term as supply pressure decreases and demand stabilizes.

XRP price could recover recent losses

XRP is trading near $2.14 at the time of writing, showing early signs of a short-term recovery. Visualization of Fibonacci retracement levels drawn from recent high to low are important reference areas. The current structure indicates that buyers are trying to regain control after an oversold signal.

The altcoin has already managed to hold support above the 23.6% Fibonacci level. The strengthening of the consolidation in this region strengthens the expectations of recovery. Beincrypto said that an upward shift is certain Requires XRP to overflow The 61.8% Fibonacci level near $2.27 has turned into support. Opening the path towards $2.41 would help offset recent losses.

Downside risks persist if support weakens. Failure to hold the 23.6% Fibonacci level exposes XRP to a renewed selling wave. In this scenario, the price could fall to $2.03. Losing this level will probably pay off XRP coin around The psychological support is at $2.00, which will prolong the decline and cancel the bullish hypothesis.