XRP is currently working on bouncing back from a notable 25% dip, causing its price to fall from $3.00 to $2.33. Investors are holding out hope for a revival, but the road to recovery may be a long one.
This delay could spell trouble for traders entangled in the ongoing market fluctuations.
XRP Traders Could Face Liquidations
The liquidation landscape for XRP paints a worrying picture for short sellers. About $400 million worth of short contracts lie between the present price and the $2.70 threshold. The substantial volume of short positions indicates traders are playing the downside of XRP's price movement, reflecting prevalent market skepticism.
An increase of just 10% in price could trigger the liquidation of these short positions, potentially propelling the price upwards swiftly. However, the abundance of short contracts underlines the market's overall cautious stance, which might impede recovery or escalate volatility if crucial resistance levels remain unbroken.
XRP's Future in the Balance
Rallying sentiment for XRP is still overshadowed by bearish indicators, with the Average Directional Index (ADX) at a significant 35.0, comfortably above the 25.0 benchmark. This suggests the downtrend's vigor persists, even post a 25% price slump. The ADX reflects the market's enduring momentum, signifying XRP is under pressure notwithstanding its recovery endeavors.
Elevated ADX levels could signal a potent bearish trend, putting up barriers against XRP's revival attempts. As long as the ADX remains heightened, it might hinder upward price momentum and lead to delays in reclaiming past peaks.
Bearing the $2.70 Resistance
Currently trading at $2.47, XRP is edging closer to the crucial $2.70 hurdle, a mere 10% away. The altcoin is tracing an ascending wedge pattern, hinting at a probable upward move. Surmounting the $2.70 resistance could pave the way for further climbs.
However, the emerging dynamics suggest a challenging ascent. XRP may face hurdles piercing the $2.70 barrier or might stick near the $2.33 support in case of persistent sell pressure. Such scenarios could confine the price within a narrow range or lead to extended downturns.
Upsurge vs. Downturn
Should bullish market signals overpower the prevailing bearish sentiment, XRP could breach the $2.70 barrier successfully. A breakthrough would convert it into a support level, potentially negating the bearish forecast and laying the groundwork for a sustainable recovery ahead.