Connect with us
DAPA Banner

Crypto World

XRP hits bottom as setup mirrors a move that preceded the 2017 rally

Published

on

XRP eyes recovery as higher lows and ETF inflows signal potential upswing
XRP hits bottom as setup mirrors a move that preceded the 2017 rally
  • XRP may have completed a long correction and formed a market bottom.
  • Analysts say the current setup mirrors the pattern before the 2017 rally.
  • A Wave-5 breakout could drive XRP toward the $5.85 target.

XRP has spent the past several months moving through a slow and frustrating consolidation phase that many traders now believe may represent the final stage of its correction.

The digital asset is currently trading around $1.38 after a period of mixed performance that has seen short bursts of strength followed by pullbacks.

This kind of sideways movement often appears near the end of a market correction, which is why some analysts are beginning to argue that XRP may already be forming a long-term bottom.

The argument is based on a technical structure that looks strikingly similar to the pattern that developed before XRP’s historic rally in 2017.

Back then, the token spent months drifting through a quiet accumulation phase while the broader market paid little attention to it.

Advertisement

When the breakout finally arrived, the price accelerated rapidly and caught much of the market off guard.

Today, analysts believe the same type of structure may be forming once again.

Several technical charts show XRP completing a large corrective pattern that has been unfolding for months.

According to this view, the correction appears to have finished its final wave, which often marks the point where a new bullish cycle begins.

If the structure continues to play out as expected, XRP could now be entering the early stage of its next major upward move.

This possibility has renewed interest among traders who remember how quickly XRP moved once momentum returned during the previous cycle.

Advertisement

Analysts point to a potential Wave-5 breakout

Furthermore, a number of market analysts have turned to Elliott Wave theory to explain why they believe XRP may be close to a turning point.

Under this model, markets move through a series of impulsive waves followed by corrective phases that prepare the ground for the next advance.

Some analysts, like Dark Defender, believe XRP has just completed an extended corrective structure that lasted several months.

That correction appears to have formed an ABC pattern, which is often seen near the end of a downward phase.

Advertisement

With that structure now appearing complete, analysts say the market may be entering the final upward wave of the cycle.

This final stage is known as Wave 5 and is typically associated with strong bullish momentum.

One widely discussed projection places the next major price objective near $5.85 if the breakout develops as expected.

Reaching that level would represent a substantial recovery from current prices and would mark one of the strongest rallies XRP has seen in years.

Advertisement

However, analysts also emphasise that the move will likely unfold in stages rather than in a straight line.

Several resistance zones remain along the path, including levels near $1.88, $2.35, and just above the $3 mark.

Advertisement

Each of these areas could slow the advance as traders take profits and the market absorbs new buying pressure.

Still, clearing those barriers could open the door for a much larger move.

Long-term projections stretch far beyond the first targets

While the $5.85 level has attracted attention in the short term, some analysts believe XRP’s potential upside could extend much further.

A more aggressive interpretation of the current wave structure suggests the asset could eventually climb toward the $8 to $14 range during the next phase of the cycle.

Advertisement

In the most optimistic scenario, the final leg of the rally could even approach the $20 region if market conditions remain supportive.

These projections remain speculative, but they reflect growing confidence that the current structure may be setting up a larger trend reversal.

Advertisement

Source link

Continue Reading
Click to comment

You must be logged in to post a comment Login

Leave a Reply

Crypto World

Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

Published

on

Aave V3 Avoided Unrecovered Bad Debt From 2023 to 2025: Study

A Bank of Canada staff paper found that Aave V3 reported zero non-performing loans in 2024, with overcollateralization and automated liquidations helping prevent lender losses in its Ethereum lending market.

Using transaction-level data from Jan. 27, 2023, to May 6, 2025, the study found that positions were typically liquidated before collateral values fell below outstanding debt, helping contain lender losses across the sample.

But the model came with a tradeoff, the paper said. While it protected lenders from unrecovered losses, it also shifted risk onto borrowers and constrained capital efficiency compared with traditional lending systems.

According to the paper, Aave V3’s design relies on automated risk controls rather than traditional underwriting, requiring borrowers to post more collateral than they borrow and liquidating positions when they breach risk thresholds.

Advertisement
Daily lending earnings, circulating supply, and borrowing volumes (USD) on Aave V3. Source: Bank of Canada

Recursive leverage fueled borrowing demand

According to the paper, Aave V3’s lending activity was not driven solely by users seeking liquidity. It found that recursive leverage accounted for over 20% of total borrowed volume and 8.2% of borrowing transactions during the sample period. 

Recursive leverage involves repeatedly borrowing against collateral, redeploying the borrowed assets as new collateral and borrowing again to amplify exposure.

Related: Aave V4 goes live on Ethereum after governance vote clears rollout

The study said the dynamic made borrowers more exposed when markets turned. According to the paper, liquidations on Aave V3 tended to occur in concentrated waves, with four assets accounting for 90% of total liquidated value. 

This includes Wrapped Ether (WETH), Wrapped Staked Ether (wstETH), Wrapped Bitcoin (WBTC) and Wrapped eETH (weETH).

Advertisement

The paper estimated that borrower losses during major liquidation events could be significant. It said liquidation fees typically ranged from 5% to 10% of liquidated value, while missed gains from subsequent price recoveries pushed combined losses to about 10% to 30% in some cases. 

The staff paper suggested that while the design for Aave V3 helped prevent unrecovered bad debt in the sample, it did so by exposing borrowers to abrupt losses when collateral prices fell sharply. 

Cointelegraph reached out to Aave for comment but did not receive a response before publication.

Advertisement

Magazine: Are DeFi devs liable for the illegal activity of others on their platforms?