XRP Encounters Significant Correction for the First Time Since November: Watch for Key Price Levels
Just a little over a week ago, the primary cryptocurrency of Ripple, XRP, was benefiting from strong upward momentum. It successfully reached a new peak for the first time in 8 months during the initial days of December, extending its prior momentum from November.
Following the recent peak, XRP has retraced as traders opted to secure some profits. To provide context, XRP reached its highest point at $2.90 on December 3rd. Since then, it has gone down to a weekly low of $1.90, marking a 20% decline.
This retracement now offers insights into where the latest rally started and concluded. By implementing a Fibonacci retracement tool from the bottom to the top range, it indicates that prices could potentially dip to the range of $1.41 to $1.69.
At the time of this report, XRP was trading at $2.31, following an unexpected pullback during Tuesday’s trading session. This behavior indicates an anticipation of further gains, thus triggering renewed demand.
If sustained selling pressure arises as market sentiment shifts from greed to fear, it could usher in more downside for XRP. An assessment of the interplay between demand and supply can offer a clearer perspective on the cryptocurrency’s demand dynamics.
Spot flows of XRP highlight that the most substantial spot inflows into the cryptocurrency were noted at the beginning of December. Inflow volumes peaked at 177.33 million on December 1st, with the latest inflow figures on December 10th amounting to $11.35 million.
Moreover, the spot flows have demonstrated a resurgence of outflows over the past ten days. XRP outflows reached a peak of $155.79 million on December 4th. Total outflows in the last ten days have surpassed inflows, portraying the retreat observed during this period.
Moving to the derivatives realm, data from Coinglass shows that XRP saw a surge in negative funding rates on December 11th, indicating a rise in short sellers with increased bearish sentiments.
The emergence of negative funding rates followed a period of declining positive funding rates, marking a cooling-off from the prior robust demand witnessed.
Considering these factors alongside the escalating spot flows, there is a growing likelihood that XRP’s descent could persist. Nevertheless, traders must remain vigilant for any potential shifts, including events that spur demand and support XRP bulls. Given the expected extreme volatility ahead, Tuesday’s scenario of liquidations may recur.