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XRP is now showing signs of recovery following the latest pullback. As a result, some analysts suggest the recent drop was a bear trap.
For context, after soaring to a local top above $3.66 two weeks back, as it rode on the broader market’s explosive rally, XRP faced intense selling pressure. Consequently, it dropped to retest the $3 psychological mark following a massive 10.34% intraday collapse on July 23.
Investors Caught in a Bear Trap
Now, with the market showing signs of a recovery, market watcher Armando Pantoja believes the recent pullback was a bear trap. For context, a bear trap happens when an asset’s price appears to be dropping further, tricking investors into selling, but then it quickly reverses and moves upward.
Interestingly, during this collapse, several market pundits advised investors against selling off their XRP. For instance, well-known author Steve Shultz insisted that investors do not sell off their tokens during the crash, citing a previous experience in which he lost a potential profit of $2 million in Bitcoin.
XRP Still in a Bullish Trend
Since these comments, XRP has regained over 10% of its value, nearly reclaiming the previous top. Data from XRP’s daily chart shows that the Directional Movement Index (DMI) is flashing positive signs. Specifically, while the ADX has dropped in recent times, it remains above 47, with the +DI (33) overshadowing the -DI (14.4).
Moreover, the Relative Strength Index (RSI) remains at the 64 mark, indicating sustained bullishness despite not yet being in an overbought zone. Notably, these figures indicate that XRP is still in an uptrend, although the momentum has cooled.
In addition, Dom noted during the latest price upsurge that the spot-perp premium, which indicates whether the market is overheated, rose to dangerously high levels. However, the drop that followed helped reset the premium, creating a healthier environment for the next leg up.
The spot‑perp premium is a potent signal
When it spiked on $XRP near its ATH, it warned that leverage was overstretched and a purge was likely 🤝
After the flush, the premium has briefly turned positive again
Check the quoted post to add it to your charts https://t.co/DfGbinmpYy pic.twitter.com/KhwNppYIGz
— Dom (@traderview2) July 24, 2025