The XRP market is once again under the spotlight as analysts warn that the asset could face a sudden flash crash amid growing liquidation pressure and weakening short-term sentiment. Market commentator ExtraVod drew attention to rising liquidation levels across the broader crypto landscape, pointing out that the setup for XRP has become increasingly fragile after the asset’s decline from its December 4 peak of 2.21 dollars to around 2.03 dollars. His warning follows a volatile session on December 5, when Bitcoin briefly dipped below 90,000 dollars and triggered more than 200 million dollars in liquidations within four hours, with Coinglass data showing that the total climbed to 412.6 million dollars over a 24-hour period, overwhelmingly from overleveraged long positions. Such large-scale liquidations tend to expose unstable market conditions where a sudden drop becomes more likely, particularly if traders are heavily concentrated at specific price levels.
ExtraVod’s analysis of XRP’s recent price action adds further weight to concerns. Since April 2025, XRP has maintained a pattern of higher lows during corrective phases, touching 1.61 dollars in early April, around 1.77 dollars in October, 1.81 dollars in late November, and finding support near 1.98 dollars at the start of December. While this upward slope might appear structurally sound, he argues that the close clustering of these lows has drawn a large number of stop-loss orders beneath them. This accumulation of liquidity, in his view, creates an incentive for market makers or highly capitalized traders to push the price downward in order to trigger those stops, which could lead to a sharp, rapid drop that fits the definition of a flash crash. Such events typically unfold in seconds or minutes, cascading as automated orders fill the market with sell pressure.
Despite the grim short-term outlook, ExtraVod highlights that this potential flash crash could ultimately serve as a reset for XRP’s broader market structure. He believes that once the accumulated liquidity is washed out, the asset may gain the breathing room it needs for a more sustainable upward trend. His optimism is supported by what he describes as a hidden bullish divergence on the weekly Relative Strength Index. After the token’s November 2024 bottom near 0.5 dollars, XRP formed a higher low while the RSI printed a lower low, dropping from around 44 and potentially slipping under 30 if a flash crash occurs. This type of divergence often suggests that an underlying uptrend remains intact even when price volatility intensifies. If XRP enters oversold territory, a strong rebound could follow once selling pressure exhausts.
The broader context of 2025 adds another layer of complexity. XRP continues to be shaped by regulatory uncertainty linked to Ripple’s prolonged legal dispute with the United States Securities and Exchange Commission. Although some progress has been made, the lack of a definitive resolution has contributed to intermittent volatility and speculation. Beyond regulation, XRP’s adoption trajectory remains a key driver, particularly in the cross-border payments sector where Ripple has continued to promote its On-Demand Liquidity technology. Any new partnerships, institutional integrations, or technological updates could shift XRP’s momentum significantly, regardless of short-term price shocks.
For investors and traders, the current environment highlights the importance of disciplined risk management. Elevated leverage has been a major contributor to market instability in recent sessions, and reducing exposure could help mitigate sudden losses if a flash crash materializes. Some traders may choose to diversify holdings across multiple assets or use strategic stop-loss levels, while long-term participants may lean toward dollar-cost averaging approaches to smooth out volatility. Whether this period represents a dangerous setup or a rare opportunity depends heavily on individual strategy and risk tolerance.
As XRP approaches a critical juncture, the market is bracing for a potentially turbulent short-term move that could either deepen uncertainty or clear the path for renewed momentum. The coming days may reveal whether the asset is poised for a painful reset or a foundation-building correction that positions it for future gains.
