XRP is seeing increased volatility, which has culminated in a dramatic wick down to a double bottom near $2.70 at the end of its consolidation phase. Analysts note that such sharp moves are typical at consolidation endpoints and often signal an imminent trend shift.

The current pattern remains valid within a Wave 2 count, provided the $2.70 level holds; any break below this threshold would reset the Elliott Wave structure and invalidate the current bullish outlook.

Wave 3 Incoming?

According to CasiTrades latest update, the current market behavior suggests that the wick was largely driven by over-leveraged traders, rather than the markets true intent.

Following the dip, price action quickly recovered above the macro 0.5 Fibonacci retracement at $2.79, and candle bodies have consistently respected this level since. Observers anticipate a potential minor retest of the $2.79 support before XRP initiates Wave 3 upward momentum.

During this retest, traders will watch for a lower low in candle bodies, ideally paired with a bullish divergence on the 4-hour RSI, which could serve as a strong buy signal.

Should XRP drop below $2.70, the Wave 2 scenario would be invalidated, and the next significant support is expected at the macro 0.618 retracement near $2.6. For now, maintaining $2.8 indicates that the market structure remains intact.

Looking ahead, the bullish scenario is intact, with major resistance targets at $4.00 and $4.40, aligning with the 2.618 and 3.618 Fibonacci extensions of the projected Wave 3. The coming days will be critical, and $2.8 could potentially serve as the crucial level to watch.

If it holds and bullish divergence develops, XRP could see a new all-time high and the subsequent start of a strong Wave 3 impulse.

This setup has emerged amidst ongoing adoption initiatives and strategic developments in the XRP ecosystem.

Market Maturation and ETFs

In a statement to CryptoPotato, Alexis Sirkia, Captain of the Yellow Network, said that XRPs trajectory is being shaped by the markets maturation, particularly with the launch of the first US XRP ETFs.

According to Sirkia, these ETFs represent not just new investment avenues, they also indicate growing regulatory acceptance and create a clearer pathway for XRP, an asset long focused on cross-border utility and compliance.

Having observed this ecosystem since its inception, Sirkia sees these advancements as an instrument to XRPs enduring vision. He also said that the temporary lull in on-chain activity this week for XRP evidences the broader altcoin slowdown rather than any flaw in the XRPLs foundational strength.

He went on to add:

As institutional adoption via ETFs and RLUSD integration gains traction, we can expect this dip to reverse swiftly, reigniting transaction volumes and propelling XRP back toward its role as a vital bridge between TradFi and DeFi. The true test of any digital assets longevity, including XRP, is not just its current market cap, but its capacity to facilitate seamless, scalable, and interconnected liquidity across diverse financial ecosystems.