Find out if a cascading short squeeze will propel XRP past the $3 psychological barrier | Credit: Hameem Sarwar
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Key Takeaways
XRP’s price still appears to be in an early cycle, as the MVRV is only 1.04.
The liquidation heatmap shows a magnet between $2.40 and $2.60.
However, the $2.00 to $2.15 region is the critical long-squeeze zone.
XRP’s price has reclaimed the $2.10 support after a high-volatility start to the year.
While the cryptocurrency is currently consolidating after its double-digit rally, three major factors indicate a potential rally that could finally break the $3 psychological barrier.
Here are the three reasons why XRP is positioned for a breakout. In this analysis, CCNa also includes the “Wild Card” that is hiding in plain sight.
First of All, XRP Price Has Not Hit the Top
The most visible driver for XRP’s price in early 2026 is the thinning liquidity on centralized exchanges.
According to CCN’s recent analysis, XRP exchange balances have plummeted to a seven-year low. As a result, the altcoin had previously reached $2.41.
Inflows into spot XRP exchange-traded funds (ETFs) also played a role. However, after nearing $2 billion in inflows, the ETFs recorded their first outflow recently.
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Still, this does not necessarily mean XRP is due for a significant correction. In fact, the Market Value to Realized Value (MVRV) ratio suggests the token remains relatively undervalued.
At the time of writing, XRP’s MVRV sits at 1.04. That level implies the average holder is only slightly in profit, so the market is not showing the kind of widespread unrealized gains that trigger heavy distribution.
More importantly, the metric is still far from the “overheated” zone that typically signals a cycle top.
That overheated range usually appears when MVRV climbs between 4.36 and 12.28.
Until XRP’s price approaches that band, the data suggests there is still room for upside before the market reaches peak valuation territory.
Analyzing the Liquidation Heatmap for XRP as of Jan. 9, 2026, reveals a high-stakes “leverage battle” following the volatile start to the year.
Traders are currently caught in a narrow range, with massive “liquidity magnets” sitting just above and below the current price.
The recent 27% weekly surge has left a trail of over-leveraged positions that the market is now beginning to “hunt.
The “Short Squeeze” Magnet ($2.40 – $2.60)
The most intense liquidity cluster on the heatmap is currently positioned between $2.40 and $2.60.
The Setup: Between Jan. 5 and 6, XRP’s price hit a local high of $2.41, triggering over $4.4 million in short liquidations on Binance alone.
However, as the price pulled back to $2.20, a new wave of bears re-entered, placing “sell” orders with stops just above that local high.
The Target: If XRP breaks and holds above $2.30, it will likely trigger a “cascading short squeeze.”
The heatmap shows a “bright yellow” band near $2.49, which represents a massive cluster of short liquidations. A move into this zone could fast-track the price toward the $2.94 Fibonacci extension.
While the upside looks promising, there is significant “downside liquidity” that market makers may target to clear out “weak-hand” longs.
The Setup: Many retail traders chased the rally toward $2.40 and opened long positions with high leverage. Their liquidation points are now densely packed just below the psychological $2.20 level.
The Target: The “Wall of Pain” sits between $2.00 and $2.15. If Bitcoin (BTC) slips below $90,000 again, XRP’s price could see a flash crash into this zone.
A drop to $2.13 would likely trigger roughly $22 million to $25 million in long liquidations, similar to the “leverage flush” seen on Jan. 8.
Reason 3 Revealed: Will XRP Price Hit $3?
From a technical perspective, XRP is currently printing a signal it hasn’t seen in months.
On the daily chart, the Holders’ Sentiment has broken the zero line for the first time since Oct. 9. This indicates that the broader perception around the altcoin has shifted from skepticism to optimism.
If this remains the same, XRP may see increased demand. Additionally, although the price has recently fallen, it has dropped below the critical $2 support level.
Moreso, bulls will likely continue to defend the key support. If this trend continues, XRP’s price might break out above $2.49.
In that scenario, the cryptocurrency’s next target could be to rise in the $3.26 direction.
On the contrary, failure to hold above $2 could crash this forecast. If that were to happen, XRP might decline toward $1.50, potentially erasing the gains it has had in 2026.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
