XRP has once again traded directly into a price zone that a few traders have come to recognize as a liquidity pocket. This area has acted as a magnet for price since December 2024, causing repeated tests and reactions that stand out clearly on the price chart. In a recent technical breakdown shared on X, crypto analyst ChartNerd highlighted how XRP has repeatedly made contact with this liquidity pocket over the past year and the cryptocurrency might be approaching a relief bounce.
Liquidity Pocket: Support Or Springboard?
Technical analysis of XRP’s price action shows that the cryptocurrency is now trading within a liquidity zone that has acted as a support range since December 2024. This liquidity zone, which spans the range from $1.90 to $1.75, has acted as a price magnet for many months. Even after reaching its all-time high of $3.65 in July 2025, XRP entered into a multi-month correction that eventually found support at this liquidity zone.
According to the analysis, nearly every prior visit to this zone was followed by some form of relief, especially when momentum indicators aligned. The last time XRP returned to this level, it slowed down its decline and eventually bounced back above $2.4 in early January.
However, the most recent push downwards played out as a 20% decline after a rejection at the $2.40 zone in early January, which has essentially pushed the XRP price action back to trading within this liquidity range and has started to show tentative stabilization.
To bring further confirmation to the setup, the analyst included the daily Stochastic RSI below the price chart. This momentum indicator, which measures relative strength and conditions of overbought or oversold pressure, is currently sitting in deeply oversold territory according to the chart. These oversold conditions in the Stoch RSI aligned with rebounds off this same liquidity pocket.
XRP Price Chart. Source: @ChartNerdTA On X
What Happens Next?
If history repeats itself, the repeated tests of this liquidity pocket and accompanying oversold signals might be clearing the road for a bounce. If XRP was underneath this pocket and rejecting at this level, that would be bearish. Holding it as support for a long duration points to a strong support strength in this area.
That said, there is another possibility that the reverse could happen. Should XRP break decisively below this zone with strong selling pressure, the technical setup would shift from supportive to bearish and leave the price action trending downwards.
Trading activity hints that recent buyers may be in a tough spot, because the mix of holders now resembles the early 2022 structure when price pressure was high. That means many participants may be below their breakeven cost basis, and this can build selling pressure over time if prices fail to move higher.
Featured image created with Dall.E, chart from Tradingview.com
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