Following a remarkable 280% surge in November, Ripple’s digital asset XRP continued its upward trend into early December, reaching $2.9 after a 30% increase.
While the momentum of the altcoin’s surge has eased off slightly in recent days, the critical short-term support level of $2.3 remains intact. What potential scenarios lie ahead for the XRP price following this period of stabilization?
Anticipated Movements of XRP
Analyzed on the shorter timeframes, XRP has diligently protected the $2.3 support since December 2nd. If this crucial short-term support continues to hold firm, XRP may aim to surpass its recent peak of $2.9 or even surge beyond $3 towards the 2021 cycle high of $3.3.
The Relative Strength Index (RSI) observed on the 4-hour chart reinforces this outlook, as it has maintained above the neutral 50 mark, indicating a strong demand for the altcoin.
Despite this positive momentum, there has been a lack of significant short-term capital inflows to confirm a bullish trend, as indicated by the neutral reading on the Chaikin Money Flow (CMF).
A breakthrough above the median threshold could strengthen the likelihood of XRP targeting $3 or even the highs of 2021.
Nevertheless, the overall market structure of XRP remains sound based on analysis from higher timeframe charts.
On the weekly charts, the price momentum remains robust, with buyers dominating the market according to the Directional Movement Index (DMI).
In the event of XRP breaking below $2.3, it might find support and approaching the Golden ratio at $1.5.
Insights from Liquidation Heatmap
Insights obtained from Coinglass liquidation heatmap data reveal the presence of liquidity zones on both ends of the price spectrum.
High levels of leveraged shorts have amassed above $2.6, while a recent touchpoint of lower-side liquidity occurred at $2.53.
Notably, untouched levels of lower liquidity exist at $2.45 and $2.38, suggesting that leveraged long positions at these thresholds may face liquidation before XRP moves higher.
Driven by liquidity dynamics, the XRP price could potentially dip towards $2.45 or $2.38 before targeting levels above $2.6.
Although the $2.3 support has proven crucial in the short term, any substantial downward move might undermine the current bullish sentiment.
Disclaimer: The views expressed above do not constitute financial, investment, trading, or any form of advice and are purely the writer’s subjective opinion.