XRP, also known as Ripple, is currently experiencing a positive long-term outlook. Following its surge to $2.9, the digital asset entered a consolidation phase characterized by steady accumulation by buyers.
Peter Brandt, a seasoned trader specializing in commodities and classical chart analysis, recently made a bold prediction, foreseeing a market capitalization of $500 billion for XRP.
Exploring XRP’s Consolidation Phase and Potential Buying Opportunities
Over the past month, XRP has been trading within a price range spanning from $2 to $2.62. The $2.31 level, situated in the middle of this range, has alternatively acted as a support and resistance zone. Currently, it is serving as a barrier to further upside movement.
In the event of a price decline, there exists a significant demand area dating back to late November, which could trigger a bullish response from XRP. Despite the consolidation, the On-Balance Volume (OBV) indicator has exhibited a gradual uptrend over the past month.
This indicates a lack of significant selling pressure and suggests a positive market sentiment. Furthermore, the Relative Strength Index (RSI) on the daily chart remains above the key level of 50, indicating the presence of bullish momentum in the market.
A potential revisit to the lower end of the range or even the $1.9 level could present a lucrative long-term buying opportunity for traders.
Heightened Short Liquidations and Market Dynamics
An analysis of liquidations in the past month reveals a notable concentration of leveraged liquidation levels between $2.33 and $2.4. The total liquidation volume towards $2.4 surpasses that towards $2.21.
As a result, an upward price movement is likely to trigger a larger volume of liquidations in the market.
Recent data indicates a decline in both Open Interest and spot Cumulative Volume Delta (CVD) over the past 24 hours. This downtrend can be attributed to the broader selling pressure resulting from a decline in Bitcoin’s price. Additionally, the Funding Rate has decreased.
Collectively, these short-term indicators suggest a bearish sentiment prevailing in the market.
The liquidation distribution suggests a potential movement towards the upper end of the range in the coming days. However, whether this would lead to a breakout from the consolidation phase remains uncertain.
For swing traders, it is advisable to consider profit-taking measures during such price movements and consider re-entering the market between $2.35 and $2.4 in case of a retracement providing support.
Disclaimer: The content provided is purely opinion-based and should not be interpreted as financial, investment, or trading advice.