Ripple (XRP) has seen a meteoric rise, with the cryptocurrency surging 500% in the last quarter of 2024. This dramatic rally has caught the attention of traders, many of whom are now betting against the token. However, data reveals that short positions worth nearly $80 million are at risk of liquidation if XRP surpasses a crucial resistance level.
XRP Shorts Facing Liquidation Risk
As of now, XRP is consolidating at $2.335, with a market capitalization of $134 billion. This consolidation phase has sparked increased speculation in the market, with nearly $80 million in short positions vulnerable to liquidation if the price climbs above the $2.40 resistance level. Short sellers, primarily from exchanges like Bybit ($8.08 million), OKX ($2.51 million), and Binance ($8.42 million), could face forced closures of their positions, leading to significant losses.
This massive short interest suggests high leverage, often associated with heightened volatility. As XRP’s price struggles to break above the resistance, it is poised for either a breakout or a potential downturn. Analyst MAXPAIN notes that XRP is currently trapped in a symmetrical triangle setup, signaling that a breakout rally could be on the horizon.
$XRP TA
— MAXPAIN (@Mangyek0) January 10, 2025
– price squeezed in symmetrical triangle = preapring for breakout
– Bollinger Band Width (BBW) = Approaching local low = breakout imminent
– but symmetrical triangle = no bias = could breakout in any direction
– exaggerate bullish divergence = breakout likely bullish pic.twitter.com/g4uGjS5pLB
Potential for a Rally or a Reversal
If XRP surpasses $2.40, it could trigger a buying spree, as liquidated shorts are replaced by long positions. This could ignite a sharp price increase, pushing the token towards higher resistance levels of $2.90, $3.00, and even $3.50. However, the outlook remains uncertain. The four-hour RSI suggests a downtrend, and any failure to surpass the $2.40 resistance could lead to a price rejection and a potential correction to lower support levels, such as $2.07 or even $1.90.
Crypto analysts also predict the possibility of a price dip towards $1.50 before XRP forms another rally. For now, XRP’s fate lies in the balance, with the $2.40 resistance being a pivotal point for its future direction.
XRP stands at a critical juncture. The next few days could determine whether a massive rally materializes or whether the cryptocurrency faces a downturn. As short positions near liquidation, all eyes are on Ripple’s ability to break through the $2.40 barrier, with market watchers anticipating the potential for a dramatic move either way.
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 Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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