XRP is navigating a crucial support zone around $3. On-chain and technical signals point to a healthy market reset rather than an overheated blowoff.

The crypto market pulled back about 1.78% after a strong risk-on rally, leaving a bit of uncertainty as traders digest recent gains and reassess positioning.

Ripple [XRP] is in the spotlight too, down almost 7% from its recent $3.40 high.

The key question remains: Is XRP trading too hot right now, or does this dip actually offer a killer chance to load up?

Looking at XRP’s chart, the longer it chops sideways, the bigger the punch when it finally breaks out of a downtrend.

Case in point: Mid-July, XRP blasted up to $3.60, clearing resistance levels we hadn’t seen since last year’s election rally. However, it then rolled over hard, carving out three lower lows and failing to hold above the $3 support zone.

That leaves the latest 5% daily pullback at a critical pivot. A bounce here could reignite upside momentum; a drop could deepen the slide, with $2.95 acting as the key safety net..

Now, spotting overvaluation signals is crucial.

If the technical cracks start showing up in on-chain data, XRP stays vulnerable as traders reset positions, which usually means less juice for quick pumps, making it less appealing.

But if this dip holds above key support and on-chain metrics stay steady, that’s a green flag. It means buyers are stepping back in, and this pullback could be a clean, lower-risk spot to load up before the next run.

On the weekly chart, $3.30 stood as the immediate hurdle. XRP bulls need to break and hold above this level to set sights on $3.60.

But when you line up these two zones, a key divergence pops up.

In fact, Realized Rrofits never cracked the $1 billion mark at $3.30, unlike at $3.60, where that peak triggered a brutal 23% sell-off in just two weeks. 

This time, the profit-taking pressure was cooler, suggesting less panic. 

The NVT ratio confirmed the difference: it surged to 167 at $3.60, the highest since last year’s election rally. 

At press time, it sat comfortably at 117, signaling that XRP wasn’t as stretched.

The derivative action is telling too. 

Even with the risk-on vibe, Open Interest didn’t blow past $10 billion. It stalled at around $8.5 billion, which points to traders keeping their exposure in check and avoiding a leverage overload.

All in all, these indicators suggest we’re seeing a healthy reset, not an overvaluation blowoff.

XRP’s in a more controlled range, with traders positioning more cautiously, setting up a solid entry window.