XRP price slides 14% after $250M in long liquidations – Bull trap ahead?

Is the market crossing the threshold from cautious optimism to outright euphoria?

Technically, this week was the most bullish since the Q3 2025 cycle began. XRP is arguably the best asset in this regard, rising over 46% this week and forming a long upper shadow at 1.70, its highest price in more than seven months. XRP was also the best-performing large-cap asset on a weekly basis.

Nevertheless, the past 24 hours could teach optimists a lesson about the market environment. As the chart below shows, XRP closed the day at $1.46, marking a sharp 14% pullback from the $1.70 local top. Furthermore, if we consider all large-cap assets, including Bitcoin [BTC] and Ethereum [ETH], the flash crash most affected XRP. This is the most evident sign that the asset’s bullish trend could soon reverse.

The outcome? A cascading bloodbath.

According to data from CoinGlass, more than $250 million in long positions were liquidated, accounting for over 72% of all liquidations, and those traders who expected the price to continue to rise have suffered significantly. Interestingly, the market seems to have shrugged off the turmoil, with analysts believing that the price will head to $2 by the end of the third quarter of this year. 

But is the market starting to outrun reality? Could Ripple’s [XRP] current setup turn into a textbook bull trap, putting more long positions at risk and leaving XRP vulnerable to a deeper correction?

Bitcoin XRP’s extreme optimism could spell trouble

XRP price predictions are becoming increasingly bullish, with analysts growing more optimistic.

However, technical factors currently drive the bullishness. The analyst notes that a similar setup to the 2024 XRP rally, which saw the price spike over 650%, is beginning to emerge. This is believed to indicate that further gains are likely, with many pointing towards the $2 level on social media.

Meanwhile, it is also worth mentioning that XRP bulls are beginning to see their optimism reflected in on-chain activity. As the chart below indicates, the Binance funding rate for XRP has climbed to a two-week high of 0.01%, suggesting that traders are beginning to deploy more aggressive long positions.

While funding rates being positive are generally bullish, it is crucial to note that rates climbing too quickly can be a sign of market weakness. If too many traders are opening long positions at once, there is likely to be a wave of liquidations should the price move sharply lower.

Notably, this appears to be what has happened over the last 24 hours, with the XRP price falling nearly 14%, the largest drawdown among top high-caps. Plus, over $250 million in long liquidations have occurred as traders scramble to reduce their exposure. This development could serve as a much-needed “reality check” for XRP after its roughly 45% weekly increase, which may have caused some traders to feel overly bullish.

As such, technical indicators may not always be reliable, and in the case of XRP, the growing number of longs may very well lead to a bull trap before the price breaks out towards $2.

Bitcoin Final Summary

• XRP’s 46%+ rally has made traders very bullish. However, rising longs and funding rates show the market may be overheating.
• The recent 14% drop and $250 million+ in long liquidations could be a warning of a bull trap before the next move toward $2.