- XRP leads major cryptos with a 20.7% daily gain, breaking through five resistance levels to trade above $1.40.
- The rally is driven by the US Treasury's plan to double long-end bond buybacks, which traders interpret as a liquidity boost.
- Spot XRP ETFs see renewed inflows, and the upcoming CLARITY Act vote in September remains a key catalyst.
- Analysts warn of overbought conditions and a potential pullback, with support levels at $1.30 and $1.34.
XRP has stormed back into the spotlight, posting its biggest single-day gain since February and overtaking USDC to become the fifth-largest cryptocurrency by market value. The token climbed 20.7% in 24 hours to trade around $1.24, with a market cap of $77.47 billion, after bottoming out at $0.9877 just three days earlier. The sudden reversal has caught many traders off guard, especially those who had piled into short positions expecting further declines.
The catalyst for this explosive move wasn’t crypto-specific but came from traditional finance. On Wednesday, the US Treasury announced it would at least double the size of its long-end bond buyback operations, raising the cap from $2 billion to $4 billion per operation starting September 9. This news sent the 30-year Treasury yield tumbling from a 2007-high of 5.34% to 5.196%, weakened the dollar, and triggered a wave of buying across risk assets, including cryptocurrencies.
What Sparked the Crypto Rally
The Treasury’s move is being dubbed “QE Lite” by traders, as it mimics the effects of quantitative easing even though it’s technically different. The central bank isn’t creating new money, but the impact on long-term borrowing costs is similar, which is why markets treated it as a liquidity signal. Gold surged to near $4,449 an ounce, and spot Bitcoin ETFs recorded their strongest inflow day since May, pulling in $517 million.
This liquidity boost triggered a massive short squeeze across the crypto market. Over $1.44 billion in short positions were liquidated on Wednesday, rising to roughly $3.3 billion by Thursday, the highest single-day total this year. Each liquidation forced traders to buy back their positions, pushing prices higher and creating a feedback loop that lifted all major cryptocurrencies. Bitcoin cleared $72,000 for the first time since early June, while Solana and Ethereum added 10.7% and 17.7%, respectively.
XRP Cleared Five Resistance Levels in Three Days
XRP’s technical breakout has been nothing short of remarkable. After bottoming at $0.9877 on Monday with its relative strength index (RSI) at 36, the token reclaimed the $1.00 support level, then broke through a descending trendline at $1.06, the 50-day moving average at $1.07, and the 100-day at $1.15. It now trades above the $1.20 ceiling that capped it in June and July, with the next major resistance at $1.30 and the 200-day moving average around $1.34.
Trading volume has exploded, with $5.21 billion in XRP changing hands over 24 hours, up from just $798 million on Monday. Buyers added $6.53 billion to XRP’s market value on Wednesday and another $4.56 billion on Thursday. This buying spree pushed XRP past USDC into fifth place on the crypto rankings, with a market cap of $77.47 billion against the stablecoin’s $72.27 billion.
Spot XRP ETFs have also seen renewed interest, recording $8.16 million in inflows across the first three days of this week, more than the whole of last week. The funds now hold over $1 billion in net assets, up from $933 million on August 14, signaling growing institutional appetite for the token.
Why XRP Outran Every Other Major Crypto
XRP’s 20.7% gain is roughly double Bitcoin’s 10.6% move, and the reason lies in its risk profile. Bitcoin now has spot ETFs, corporate treasuries, and a settled regulatory status, making it the “safe” end of crypto. XRP, on the other hand, lacks these institutional pillars, so it falls steeper when liquidity tightens and climbs higher when it loosens. This volatility cut both ways, but this week it worked in XRP’s favor.
Adding to the bullish sentiment, President Trump met with crypto executives at the White House on Wednesday, including Ripple CEO Brad Garlinghouse and SEC Chair Paul Atkins. The meeting pressed the Senate to pass the CLARITY Act, which would settle whether XRP and other cryptos fall under securities law. A favorable vote on September 15 could be a game-changer for XRP’s institutional adoption.
However, caution is warranted. XRP’s RSI has crossed above 50, indicating buyers are in charge for the first time since June, but it needs to clear 60 to confirm a genuine buy signal. The 200-day moving average at $1.34 is about 8% above the current price, and a falling trendline slopes toward it. XRP has taken back 45% of its decline from $1.55 to $0.99, but it still lags Ethereum, which has already cleared its own 200-day average.
Can XRP Hold Fifth Place?
XRP’s lead over USDC is $5.20 billion, and since a stablecoin’s market value only changes when its supply changes, the ranking depends entirely on XRP holding these levels. A 6.7% fall would lose the ranking, but the current momentum suggests it could hold through the end of August. The bigger test comes on September 9, when the Treasury’s larger buybacks begin, and September 15, when the CLARITY Act faces a Senate vote.
The rally also rests on a fragile foundation. The Treasury’s buybacks haven’t started yet, so none of that money has entered the market. Liquidations drove the move, and those stop once short positions are gone, meaning fresh buyers need to take over. If the 30-year yield holds below 5.10%, it would do more for XRP’s price than any other single factor.
In the meantime, XRP’s signals still say caution. The RSI is at 83.5, deep in overbought territory, and the Average Directional Index (ADX) at 32.4 confirms a strong trend but also suggests a pause or pullback wouldn’t be surprising. Key support sits at $1.34, then the golden zone between $1.0754 and $1.0965, with $0.9862 as the deeper floor.
Looking ahead, the next real tests are the Treasury’s buyback implementation and the CLARITY Act vote. If both go well, XRP could challenge $1.65–$1.70, with $2 becoming a realistic target. If not, a pullback to $1.30–$1.40 is possible. Either way, this week’s rally has firmly put XRP back on the map, and traders will be watching closely to see if it can sustain the momentum.
