XRP is trending down towards $1.10 as a selloff driven by liquidations pushes the token to its lowest levels in several months. After experiencing a high-volume breakdown that overwhelmed the support level around $1.20, XRP lost an additional 5%, leading traders to speculate whether this recent downturn signifies capitulation or the beginning of a more significant decline.

Key points to note:

— XRP has slipped to its weakest position in months due to liquidation-style selling, momentarily falling below $1.10 before buyers entered the market around $1.09.

— Despite attracting approximately $4 million in new XRP ETF inflows and cumulative inflows nearing $1.5 billion, market sentiment has soured, as the token has fallen behind USDC in terms of market capitalization, and the broader crypto Fear & Greed Index has dropped into a state of extreme fear.

— Analysts identify $1.09 to $1.10 as a crucial support range, while $1.12 to $1.13 serves as the initial recovery zone. The overall trend remains bearish until prior support levels are convincingly reclaimed with stronger rebound volumes.

XRP is no longer contending with the $1.20 level; the focus has shifted to whether the $1.10 level can hold. The recent selloff was marked by a volume typically associated with forced liquidations rather than typical selling, pushing the token to its lowest levels in months before dip buyers stepped in at around $1.09.

Background of the news

• XRP ETFs saw around $4 million in inflows following their first daily outflow in three weeks, bringing cumulative inflows to about $1.5 billion.

• Market sentiment has sharply declined across the cryptocurrency space, with the Fear & Greed Index dropping into extreme fear territory as traders reacted to wider macroeconomic uncertainties.

• XRP has also fallen behind USDC in market cap rankings following the selloff, which brought its valuation below $75 billion.

Summary of price action

• XRP dropped from $1.17 to $1.11 during the 24-hour trading period, hitting lows near $1.09 before making a slight recovery.

• The most significant movement occurred during the June 5 06:00 UTC session, where volume surged to 268.2 million XRP, contributing to the breakdown.

• A failed attempt to rally towards $1.133 was later reversed sharply, pushing the price to new lows before buyers emerged around $1.10.

Technical analysis

• The main takeaway is that support levels are increasingly acting as resistance. What was once a buying zone around $1.20-$1.25 just days ago is now where sellers are reappearing.

• The dip below $1.10 briefly placed XRP in one of the most oversold situations seen in years, with weekly RSI readings reaching levels that have historically coincided with major cycle lows.

• However, being oversold does not inherently indicate bullishness. Markets can remain in an oversold state longer than traders anticipate, particularly during liquidation-driven declines.

• The bounce from $1.09 suggested signs of seller fatigue, but recovery volume was still weaker than the preceding selling.

What traders should monitor

• The $1.09-$1.10 range is now the most critical support area on the chart. Losing this level would shift attention towards the $0.92 zone identified by various analysts.

• The $1.12-$1.13 area becomes the first recovery zone that XRP needs to reclaim for any stabilization narrative to gain credibility.

• The broader trend remains bearish until XRP begins to reclaim previous support levels instead of merely bouncing from oversold conditions.

• Traders searching for signs of a sustainable bottom will likely want to see stronger volume during rebounds compared to selloffs, a condition the market has yet to fulfill.