In one of the most shocking turnarounds in crypto trading this year, XRP has just experienced what many now call “the biggest bear trap in its history.” Armando Pantoja, a well-known crypto investor and advisor at Benzinga Crypto, believes the recent price movement wasn’t just another correction—it was a masterclass in market psychology and a wake-up call for short sellers.
A New All-Time High, Then Sudden Collapse
The drama began when XRP surged past its previous resistance levels in a bullish rally that had traders on the edge of their seats. After years of stagnation since 2018, XRP finally reached a new all-time high of $3.65, igniting excitement across the XRP community.
But the celebration was short-lived.
Within hours, the price plummeted to $2.99, slicing through critical psychological and technical support zones. Panic-selling kicked in, and traders rushed to open short positions, anticipating a much deeper correction.
However, the market had a different plan.
Rapid Recovery and the Trap Snaps Shut
Just as quickly as it fell, XRP bounced back, reclaiming the $3.00 mark and stabilizing around $3.19. This lightning-fast reversal caught short sellers off guard, triggering a wave of forced exits and stop-losses as the price surged.
This is what defines a bear trap—a false signal that lures traders into shorting an asset just before it rebounds.
Understanding the Bear Trap Mechanism
A bear trap occurs when the price of an asset appears to be breaking down below a key support level, encouraging traders to enter bearish positions. But instead of continuing downward, the price reverses sharply, leading to losses for those who bet against it.
In this case, the drop from $3.65 to $2.99 looked like the beginning of a major correction. The break below $3.00 was enough to make many believe the rally was over. Yet, XRP’s immediate bounce back destroyed that narrative and turned the tables on the bears.
What’s unique here is that XRP didn’t even need a prolonged consolidation to reclaim support. It snapped back with such speed and strength that it confirmed buyers were firmly in control. The failed breakdown at $3.00 now serves as a technically significant validation of strong buying interest.
Why This Trap Was Different
While bear traps aren’t uncommon in crypto markets, the scale and timing of this one made it exceptional. It occurred right after an all-time high, a period usually associated with increased volatility and uncertainty. Many short sellers likely believed they were catching the start of a classic post-peak correction.
Instead, they found themselves on the wrong side of a violent squeeze.
The psychological whiplash of watching XRP collapse and then instantly rebound created a ripple effect through the market. Sentiment flipped rapidly, and traders scrambled to readjust positions, adding more fuel to the rebound.
What’s Next for XRP?
The aftermath of this event has reestablished $3.00 as a critical support level for XRP. Despite the recent volatility, the broader uptrend remains intact, with XRP still trading well above its early July prices.
Technical analysts are now eyeing double-digit targets as several bullish indicators continue to line up. Momentum has shifted back toward the bulls, and if XRP can hold above $3.20 in the near term, further upside could come sooner than expected.
Conclusion
The recent XRP price action wasn’t just a fluke—it was a textbook bear trap that punished overconfident shorts and reaffirmed the strength of the ongoing bullish trend. As XRP reclaims its footing, this event may go down as a pivotal moment in the coin’s journey toward mainstream adoption and higher price milestones.
Whether you’re a long-term holder or an active trader, one thing is clear: underestimating XRP in this market might be the biggest trap of all.
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