Crypto market analyst Ali Martinez has issued a cautionary note regarding the potential for a deeper correction in XRP, citing a series of bearish indicators across various metrics, including price trends, on-chain data, and investor behavior.
In a Twitter thread shared early Wednesday, Martinez stated, “XRP may be headed for a deeper correction. Here’s why!” He highlighted a Tom DeMark Sequential sell signal observed on the three-day chart, which he noted appeared “right at the local top” and has contributed to the ongoing price pullback. This analysis follows his previous note indicating that $2.40 is the “next key support level to watch” after the three-day TD sell signal was triggered.
Martinez elaborated on the market structure, explaining that while the $3.00 level has occasionally served as support, historical accumulation trends suggest that $2.80 is merely a temporary buffer, with significant support expected below $2.48—an area he has identified using on-chain positioning.
He reiterated on August 3 that “past accumulation behavior points to $2.80 as a temporary buffer for XRP, but real support begins below $2.48,” emphasizing that the most critical level to monitor remains $2.40. Independent reports of his analysis corroborate these levels, indicating that $2.80 acts as a minor cushion while stronger demand exists below $2.50.
Recent flow data has reinforced the bearish outlook in the near term. Martinez reported that large investors, or whales, have sold over 720 million XRP, increasing sell-side pressure in recent sessions. Earlier, on August 2, he noted that “whales have sold over 710 million $XRP in the past 24 hours!” This surge in large-holder sales has been highlighted by various market trackers and analyses over the past few days.
Martinez also pointed out that the Market Value to Realized Value (MVRV) signal has turned sharply negative, stating, “The MVRV ratio just flashed a death cross,” which he described as “another sign that a steeper correction could be underway.” This warning highlights the increasing downside risk if the cost basis for short-term holders starts to exceed market value.
While the term “death cross” is typically associated with moving averages, Martinez employs it here to denote a momentum break in MVRV trends. The TD Sequential model, developed by Tom DeMark and often used to predict trend reversals, has been pivotal in Martinez’s assessment since late July, when he observed a three-day “sell” signal near the peak of the most recent rally.
He has since characterized the path of least resistance as downward unless the market can achieve sustained closes above the high-volume node around $3.00 to $3.20, while on-chain profiles continue to highlight $2.48 to $2.40 as the zone of “real” demand. As he stated on August 3, “The next key support level to watch is $2.40!”
Currently, Martinez’s analysis is built on three main factors: a sell signal on the three-day TD Sequential, significant distribution by large holders, and a bearish MVRV crossover. He argues that these elements increase the likelihood of a deeper correction toward the high-$2 range, and if momentum weakens further, possibly into the mid-$2 range.
The ability of bullish investors to maintain the support levels near $2.80 may determine whether XRP’s decline is merely a standard pullback or evolves into a more substantial reset towards the $2.40 level. As of the latest update, XRP is trading at $2.93.
