Key factors:
XRP (XRP) is flashing a well-recognized technical sample that has traditionally preceded sharp short-term worth rebounds.
XRP bulls nonetheless give attention to $5 regardless of newest dip
XRP’s three-day chart exhibits a “hidden bullish divergence,” the place the worth varieties greater lows whereas the relative strength index (RSI) posts decrease lows. In technical evaluation, most analysts understand this sample as an indication of weakening draw back momentum.
Two such divergences appeared in XRP’s current historical past.
The primary fashioned in early 2022, resulting in a 69% bounce earlier than costs resumed their broader decline. The second emerged between late 2023 and early 2024, previous a 49% rally that led to the worth stabilizing.
Each examples present that XRP typically noticed fast rebounds after the hidden bullish divergence sign, however these rallies didn’t final lengthy. In different phrases, this setup can spark short-term positive aspects, but it surely doesn’t essentially imply a bullish reversal has begun.
XRP dropped 11.95% in the final 24 hours and was buying and selling for as little as $2.229 on Tuesday.
“I’d be hoping to carry this vary and spring again as the week goes on, however the bias is bearish in the second,” said pseudonymous analyst Man on the Earth, who noticed the hidden bullish divergence on the XRP charts.
He added:
“$2.20 is subsequent help with the 2025 main help between $1.90 and $2 subsequent up if we lose this vary.”
The help space aligns with the decrease trendline of XRP’s prevailing symmetrical triangle construction and its 1.0 Fibonacci retracement trendline, as proven under.
The upside goal for the symmetrical triangle is round $5 in the occasion of a breakout, representing a acquire of about 115% from the present worth ranges.
This XRP construction reinforces the bounce setup offered by the hidden bullish divergence.
Over $695 million in XRP shorts in danger
Derivatives information exhibits a rising imbalance between lengthy and quick positions on XRP.
As of Tuesday, XRP’s cumulative quick liquidation leverage exceeded $695 million, in contrast with simply $32.1 million in lengthy publicity, in accordance with CoinGlass. It displays a market closely tilted towards quick positions, signaling rising pessimism amongst merchants.
Most of this short-side liquidity is concentrated between $2.60 and $3.50, suggesting that even a modest rebound towards this vary might set off a cascade of quick liquidations, or a possible “quick squeeze.”
In the meantime, there’s little to no long-side liquidity under $2.16, signaling that the lengthy flush has already occurred throughout the October correction.
Associated: Is XRP the new Bitcoin? Why Wall Street can’t stop talking about its ETF
The present setup implies that XRP’s draw back danger could also be restricted in the close to time period, whereas upside volatility might intensify if worth climbs into the short-heavy zone.
This text doesn’t comprise funding recommendation or suggestions. Each funding and buying and selling transfer includes danger, and readers ought to conduct their very own analysis when making a choice.
