$XRP XRP impressed the market, soaring to $1.95, a level not seen since April 2021! 📈 The 26.5% increase in 24 hours is linked to active discussions about the potential approval of the Ripple RLUSD stablecoin by the New York Department of Financial Services (NYDFS).
But can we expect the rally to continue? 🤔 Technical and market indicators suggest a possible correction.
📊 The price of XRP has faced strong resistance at the upper boundary of the ascending channel. This level has previously led to short-term pullbacks. Additionally, the RSI (Relative Strength Index) exceeds 80, indicating overbought conditions. Historically, such RSI levels are accompanied by price declines. Key support zones may become $1.75 (lower boundary of the channel) and $1.48 (50-day EMA). This suggests a potential decline of 20%.
🐋 Whale activity confirms the weakening of the bullish momentum. According to Messari data, large holders have begun to reduce their balances. On November 24, their supplies peaked at 90.73 billion XRP, but have since fallen by 30 million XRP. Selling at multi-year highs is a classic profit-taking strategy, which increases pressure on the market.
💥 The XRP derivatives market also shows alarming signals. Open interest (OI) reached a record high of $3.19 billion, indicating an overload of speculative long positions. A scenario of mass liquidations already occurred in November when a similar spike in OI led to a 17% price drop.
⚠️ If the price starts to decline, traders with high leverage risk falling into the liquidation zone, which will intensify the downward movement.
XRP is currently in a zone of elevated correction risk. Current resistance levels, whale activity, and an overloaded derivatives market create pressure that could lower the price by 20% in the coming weeks.
For traders with long positions, it is important to partially take profits at current levels. Those looking for an entry point should watch the support zones around $1.75 and $1.48.
The market is cyclical, and after powerful surges, pullbacks often follow. Be cautious and analyze the situation. Happy trading! 💼📉
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