XRP Price Drop: Market Analysis
The cryptocurrency market experienced $657 million in liquidations over the past 24 hours, leading to declines in major cryptocurrencies. Bitcoin (BTC), Ethereum (ETH), and XRP saw price drops of 3.89%, 4.20%, and 6.49%, respectively. Bitcoin's rejection at a key technical level triggered a broader sell-off, directly impacting XRP due to its high correlation with BTC.
According to VeloData (https://velo.xyz/chart), XRP's Open Interest (OI) decreased by $140 million in 17 hours. This significant drop in OI suggests a clearing of overleveraged positions, potentially creating a buying opportunity for some investors.
A 7% drop in XRP over 12 hours resulted in $23 million in long liquidations. This sharp decline ended an 18-day period of range-bound trading, forming lower highs and lower lows. Technical analysis reveals a falling wedge pattern, which typically suggests a bullish breakout. However, the current market downturn, largely influenced by Bitcoin's performance, counters this expectation.
Despite the recent crash, XRP has retested a key support level at $2.139. This level corresponds to a high trading volume on May 4th, which preceded an 18% rally. Therefore, a retest at this level could provide a stable support, potentially forming a bottom.
Will the XRP price decline halt here? Technically, the indicators favor bullish sentiment. However, as noted in previous CoinGape coverage (link to Bitcoin article), Bitcoin's outlook remains bearish. Therefore, investors should monitor Bitcoin's recovery for confirmation of a potential XRP bottom. Failure to maintain above $105K for Bitcoin could trigger a steeper correction, possibly revisiting $100,000. This would likely cause XRP to follow suit due to their correlation.
Under bearish conditions, a retest of the $2 psychological level for XRP is a possibility. Investors should exercise caution and manage risk appropriately.
Disclaimer: This analysis presents observations and potential scenarios. Market conditions are dynamic. Conduct thorough research before making any investment decisions. Codeum is not liable for personal financial losses.