The XRP price is approaching a crucial level that could lead to wide-scale liquidations among short traders. As XRP edges closer to the $3 mark, market analysts warn of a potential squeeze that could ripple across the crypto market.

Why $3 Is a Critical Zone for XRP Shorts

According to crypto market analyst CW, the $3 level is packed with short positions. A liquidity heatmap reveals a substantial concentration of stop orders at this price, making it a key threshold for triggering mass liquidations. If XRP manages to break through this resistance zone decisively, short positions may be forcefully closed, fueling a rapid price acceleration.

Currently, XRP trades just shy of this line, hovering between $2.85 and $2.95. The narrow resistance range between $2.90–$2.95 is acting as the immediate ceiling. Should it clear this area, the road to $3 becomes viable, potentially unleashing a significant wave of short liquidations.

As of now, XRP is priced at $2.87, supported by a robust daily trading volume of $4.67 billion. While the token has slipped 1% in the past day and 8% over the last week, liquidity remains strong. Institutional players have been particularly active, with recent turnover reaching 155 million during rebounds—well above the typical 63 million daily average—signaling steady investor interest.

Long-Term Holders Are Locking In Gains

Recent on-chain data from Glassnode suggests long-term XRP investors have been monetizing gains during the latest consolidation. Realized profits spiked to over $2 billion during the recent correction, indicating heavy sell-side activity from seasoned holders.

This isn’t the first time XRP has seen such profit-taking behavior. Back on July 24, traders locked in around $375 million as XRP peaked at $3.55, leading to a sharp 10% drop—the steepest single-day fall in more than three months. The current consolidation below $3 may signal a similar pattern, hinting that strategic holders are positioning for another potential swing.

Profit-taking data points to heavy distribution by long-term XRP holders. Source: Glassnode/X

Technical Signals Suggest a Rebound

Market analyst Ali Martinez recently highlighted a bullish reading from the TD Sequential indicator on XRP’s hourly chart. This tool previously predicted the July top at $3.65 and is now flashing a buy signal, suggesting potential for a near-term rally.

Despite broader crypto market pressure—with $360 million in recent sector-wide liquidations—XRP continues to draw support buying activity. This resilience underscores XRP’s position as one of the more stable assets amid volatility.

Ripple Expands Global Reach with New Stablecoin Deal

Ripple Labs has announced a new partnership with Japanese financial conglomerate SBI Holdings. As part of the agreement, SBI VC Trade will begin distributing Ripple’s upcoming stablecoin, RLUSD, in Japan starting in Q1 2026. This move underscores Ripple’s strategy to solidify its footprint in the Asia-Pacific region, further integrating decentralized finance into traditional banking systems.

Related: XRP Price: $12M Max Pain for Bears

This development could prove crucial for XRP’s long-term adoption, especially as the company explores more real-world use cases for its blockchain technology and payment solutions.