XRP traders are on edge as the cryptocurrency market experiences heightened volatility, and a significant liquidation risk looms over short sellers. According to the liquidation map for XRP, approximately $400 million worth of short contracts are positioned between the current price and the $2.70 mark. This concentration of short positions highlights a prevailing skepticism in the market, with traders betting against XRP’s price movement.
Should XRP see just a 10% increase, these short positions could face liquidation, potentially triggering a sharp upward price movement. However, the substantial number of short contracts in place signals a cautious market sentiment, which may delay any recovery and amplify further volatility if the price fails to break through key resistance levels.
Despite these potential liquidations, the broader market momentum remains bearish for XRP. The Average Directional Index (ADX) currently sits at 35.0, well above the 25.0 threshold, suggesting that the downtrend remains strong. Even after XRP’s 25% price crash, the ADX points to ongoing selling pressure, which could impede any upward movement in the short term. Should the ADX rise further, it would reinforce the bearish trend, creating resistance for any recovery attempts.
As of now, XRP’s price is hovering around $2.47, just 10% away from the crucial resistance at $2.70. The altcoin is trading within an ascending wedge pattern, which typically signals a potential price rise. However, this rise may face considerable resistance. XRP could struggle to break the $2.70 barrier or consolidate near the support level of $2.33 if selling pressure remains dominant.
Also Read: XRP Set for Potential Breakout: Dark Defender Predicts Bullish Momentum and Price Surge
In the event that bullish market sentiment overpowers the prevailing bearishness, XRP could break through the $2.70 resistance, transforming it into support and potentially invalidating the current bearish outlook. A successful breach could pave the way for a more sustainable recovery in the near future.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of CoinBrief.io. Before making any investment decisions, you should always conduct your own research. Coin Brief is not responsible for any financial losses.
