XRP Bounces From Liquidity Sweep: Can $1.72 Flip the Bearish Trend?

After a sharp selloff that triggered a liquidity sweep near $1.12, XRP has rebounded to $1.43 as of March 5, 2026, posting a solid 4.69% gain in the last 24 hours. However, this recovery remains within a larger bearish structure marked by lower highs and lower lows. The critical question now centers on whether buyers can maintain momentum above key technical levels or if this bounce merely represents another relief rally in an ongoing downtrend.

The recent liquidity sweep wiped out weak hands at the lows, but the token’s broader price action still reflects sustained selling pressure. XRP previously failed to reclaim the $3.60-$3.70 cycle top, declining sharply before the latest liquidity event flushed out leveraged positions. Now traders must assess whether the bounce from $1.12 represents genuine accumulation or simply another corrective move within the dominant downtrend.

The $1.12 Liquidity Foundation: How Deep Support Halted the Selloff

The $1.12 level emerged as the market’s most critical structural floor, where aggressive buying pressure successfully halted further breakdown. This support zone now functions as the primary demand base following the liquidity sweep. Losing this level would expose $1.00 as the next psychological barrier, with a further $0.85-$0.90 breakdown extension zone representing the next downside target if selling resumes.

The successful defense of $1.12 signals that bulls remain committed to supporting the price at this liquidity level. However, the broader structure demands more convincing evidence. Momentum indicators show early signs of strengthening, with the DMI revealing rising positive directional movement. Additionally, the ADX has climbed above 30, signaling building trend momentum. These technical improvements suggest that the liquidity sweep may have finally exhausted the nearest sellers.

Resistance Hurdles Block the Recovery Path

On the upside, buyers face multiple layers of resistance that must fall to confirm a sustained recovery. The first meaningful barrier sits at $1.72, which aligns with the 0.236 Fibonacci retracement. Clearing this level would validate the bullish case and potentially open the path toward higher targets. Above that, $2.09 forms a strong supply region near the 0.382 retracement, where previous sellers lurk.

The $2.39 level marks the mid-range 0.5 Fibonacci retracement, another zone where sellers previously dominated price action. A decisive breakout above these levels would prove critical. The major reversal threshold stands near $2.69, the 0.618 retracement. A sustained breakout above that zone would significantly alter the macro structure and likely signal the end of the current downtrend.

Market Deleveraging Cools Speculative Heat

The derivatives data reveals shifting market participant behavior. Earlier in the cycle, open interest expanded sharply from below $1 billion to nearly $9 billion, coinciding with aggressive leveraged positioning. A second expansion phase pushed open interest above $10 billion before sharply resetting. Currently, open interest has compressed to near $2.3 billion, reflecting widespread deleveraging and reduced speculative exposure.

This contraction signals that the liquidity sweep successfully purged excess leverage from the system. While this cooling of speculation could support a more sustainable price base, it also means volatility could resurge once fresh leverage rebuilds. The spot market reinforces this cautious view—persistent net outflows have dominated recent months, with large deposit spikes often exceeding negative $100 million. Inflows remain limited and short-lived, suggesting buyers appear during rebounds but lack sustained follow-through strength.

Key Technical Levels Define the Next Move

XRP now sits at a critical juncture. At $1.43, the token trades well above the $1.12 liquidity low but still struggles beneath meaningful resistance. The technical structure remains challenged by lower highs and lower lows, though short-term momentum has begun to stabilize following the recent deleveraging phase.

The upside path appears clearly defined: $1.72 acts as the first crucial test, followed by $2.09, $2.39, and ultimately $2.69. A decisive close above $1.72 would suggest that the recovery attempt holds conviction. Conversely, failure to hold $1.12 would risk exposing $1.00 and the $0.85-$0.90 extension zone. Until buyers demonstrate control by reclaiming $1.72, rallies may remain corrective in nature rather than marking the start of a new uptrend.

Will XRP Recover?

The near-term outlook depends on whether buyers can defend the $1.12 structural support while pushing decisively above $1.72. Stronger spot inflows would strengthen recovery odds considerably. Additionally, sustained momentum with a rising ADX could support continuation toward $2.09 and beyond. However, the failure to hold $1.12 would risk breaking the current demand base and exposing lower support levels.

For now, XRP sits in a pivotal range following the liquidity sweep that purged excess leverage. Momentum builds gradually, but structural confirmation above $1.72 will prove decisive for determining the next substantial move. The stage is set—buyers must now prove they can sustain pressure at key resistance to flip the bearish trend.