XRP Just Lost the Floor — Why $1.10 Is a Real Risk and How Traders Should Position for a Fast Drop

A breached floor that matters now

XRP has peeled off a support layer that had kept bulls safe for weeks, and that break is not just another shakeout. The price action and market plumbing now line up in a way that makes a slide toward $1.10 — a psychological and structural low — a realistic, high-impact outcome for portfolios in the coming days to weeks.

Why $1.10 is credible: the market lost a multi-timeframe support band that had been absorbing selling. Volume picked up on the downside, liquidity pooled above the break, and derivatives open interest ticked in a way that increases the chance of short-term forced selling. For traders and allocators, this isn’t academic: a rapid move to $1.10 would wipe out a meaningful chunk of recent gains and create painful margin and funding shifts across spot and derivatives desks.

How the charts make $1.10 plausible

The technical picture across timeframes shows coordinated weakness rather than a single bad candle. On the daily chart the recent breach under the 1.90–2.00 band turned that area into supply; on the 4-hour the move triggered a bearish TD Sequential countdown that finished with a sequence of downside candles and growing volume. In plain terms: sellers are organized and buyers did not step in when price re-tested the broken band.

Support/resistance map you need to watch: the market just lost 2.00 and 1.90; the next clear demand zones are 1.80 and then the low-probability-but-high-impact pocket at 1.10. Those are not arbitrary — they’re where orderbooks thin and historical liquidity clusters appear on the volume profile. When a thin liquidity pocket sits between current price and a distant, stronger bid, the path of least resistance is down: market orders eat through stops, triggering more market orders in a cascade.

Volume profile and liquidity pockets matter because they show where stop-losses and margin calls are likely stacked. The probability ladder here favors a further drop unless price can reclaim 1.90 quickly and with conviction. A recover-above-2.05 move would neutralize the short-term bearish case; failure to do so in 24–72 hours leaves a 30–45% probability — in our view — that price will reach 1.10 within two to three weeks.

Whales are buying — accumulation or a liquidity trap?

On-chain activity shows large addresses increasing holdings even as price falls. At first glance that looks bullish: big wallets are adding. But the on-chain detail flips the narrative. The top-level flows indicate two simultaneous behaviors: concentrated buys from a handful of dormant wallets and heavy exchange inflows from other large holders. That spread — one group moving coins off-exchange while another moves into exchange custody — creates a knife-edge in liquidity.

Taker cumulative volume delta (CVD) has been more negative than the simple balance changes suggest, meaning more aggressive selling hit the market than passive buys absorbed. In practical terms, whales accumulating quietly can actually reduce short-term liquidity: they hoard inventory off-exchange, so there are fewer passive bids to catch a fast drop. Meanwhile, exchange inflows are building supply on platforms where algos and liquidators can execute quickly.

The net effect: looks like accumulation, behaves like a trap. If selling intensifies, the buy-side will feel shallower than headline wallet charts imply, increasing the odds of a rapid move into that 1.10 pocket.

ETF plumbing amplifies moves — why institutional flows matter more than ever

XRP’s institutional buckets have matured. With several XRP ETFs now trading and showing stronger relative flows versus BTC/ETH products, creation and redemption mechanics can act as a force-multiplier. ETF outflows require sponsors to source liquidity — and in thin moments that means hitting spot or using derivatives to synthetically rebalance, which pushes price faster than a retail wave would.

Two dynamics to watch: creations/redemptions and dealer inventory. Large redemptions force sponsors to sell into the market; if they use futures to hedge, that raises open interest and can exacerbate deleveraging when price drops. Conversely, heavy creation during a dip can mute downside, but only if sponsors can access liquidity without paying a steep premium — which they may not if orderbooks are thin between current price and 1.10.

Put simply: ETF mechanics can turn a technical breakdown into a fast market move because institutional flows operate at scale and on tight timelines. That’s why a breach that looks like a retail scalp can become a material portfolio event.

Three realistic ways this plays out — trades, stops and timeframes

1) Bearish cascade (probability: 35%): Price fails to reclaim 1.90 within 48–72 hours. Flow-driven selling (ETF redemptions + exchange liquidations) forces price toward 1.10 within one to three weeks. Trade: short on a clean break under a 1.80 re-test, initial target 1.35 and longer target 1.10; use a tight stop above 1.95 and scale size so max portfolio exposure is small (e.g., 1–2%).

2) Mean-reversion gap-fill (probability: 30%): Aggressive selling exhausts itself into 1.80–1.70 range, followed by a sharp rebound to 2.10 as buyers step in. Trade: buy a disciplined dip in the 1.70–1.80 band with a tight stop under 1.65; scale out on strength toward 2.10–2.20. Time horizon: days to two weeks.

3) Whale-led squeeze (probability: 20%): Coordinated off-exchange accumulation becomes visible as a sudden, liquidity-starved short-squeeze. Price rips through 2.20 into 2.60+ on a low-volume snap-back. Trade: use asymmetric options or tight long-gamma positions sized for payoff, not allocation — this is a high-risk, low-probability pick that can pay if liquidation cascades reverse quickly.

4) ETF-driven liquidity shock (probability: 15%): Large institutional rebalances force a one- to three-day collapse toward 1.10, then shallow recovery as sponsors cover. Trade: avoid mid-size positions; favor nimble strategies that can be executed via limit orders or options to control downside.

The hidden risks few traders price in

Tax-loss flows into year-end: institutional and retail sellers harvesting losses can add to selling pressure. If calendar-driven exits align with technical weakness and ETF redemptions, it creates a double squeeze on liquidity.

Derivatives gamma and dealer inventory stress: dealers carrying hedged option positions must trade spot as delta moves. When gamma ramps under falling prices, dealers sell into weakness to stay hedged, amplifying the drop. That dynamic is fastest when orderbooks are thin.

Custody onboarding and withdrawal friction: ETFs and large custodians face multi-day withdrawal and settlement windows. In a fast move, that delay prevents immediate rebalancing and leaves sponsors holding concentrated exposures or needing to access spot liquidity under duress — a recipe for sharper moves.

Behavioral crowding: retail stop orders cluster under visible levels and, once hit, can create feedback loops. Traders who see big wallets ‘buying the dip’ often widen position sizes; if those buys are actually re-shuffles or internal transfers, it leaves these new buyers vulnerable to a squeeze.

Bottom line: the technical damage is real, on-chain flows don’t offer a clean rescue, and institutional plumbing can turn a technical breakdown into a fast market move. Traders should be defensive around current levels: favors short-biased or protected long exposure, tight stops, and position sizes that survive a rapid trip to $1.10.

Sources

• cryptopotato.com
• youtube.com
• cryptopotato.com
• cryptopotato.com